Settlement

AuthorKenneth L. Dorsney
Pages357-375
357
chapter 15
Settlement
I. Introduction
The litigation practices described throughout this book carry significant
risks for all parties involved. Brand-name drug manufacturers run the risk
that their patents may be declared invalid, unenforceable or not infringed,
which could potentially open the door for generic competitors, deplete their
market, and eliminate revenue for funding additional research projects.
Generic drug companies run the risk that they could be found to infringe
a valid patent, delaying their entry into their intended market until the
expiration of the patent, eliminating their competitive advantage, and sig-
nificantly reducing their prospective revenue. Moreover, brand-name and
generic drug manufacturers alike must endure the burden of allocating
large amounts of corporate resources to the litigation, including both time
and capital, which could be directed to other activities. For these reasons,
and for the sake of efficiency, Abbreviated New Drug Application (ANDA)
litigation frequently ends in settlement. This chapter explores the forms
of settlement in ANDA litigation and the factors parties should consider.
II. Frequency of Settlement
From 1992 to 2000, approximately 40 percent of all ANDA litigations
ended in settlement.1 Since that time, settlement of ANDA litigation has
become even more prevalent. In 2010, the Federal Trade Commission
Michael V. O’Shaughnessy and Rebecca Harker Duttry, McDermott Will & Emery LLP.
1. See
FED. TRADE COMMN, GENERIC DRUG ENTRY PRIOR TO PATENT EXPIRATION: AN FTC
STUDY 10
(2002), https://www.ftc.gov/sites/default/files/documents/reports/generic-drug-
entry-prior-patent-expiration-ftc-study/genericdrugstudy_0.pdf.
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CHAPTER 15
358
(FTC) indicated that the number of ANDA settlements has doubled
approximately every other year.2 Whereas 14 ANDA litigations resulted
in settlement in 2004, that number skyrocketed to 113 in 2010, and
increased by yet another 38 percent during the next year, with 156 settle-
ments in 2011 (see table 1).3 Although in 2012 and 2013 the number of
settlements decreased slightly to 140 and 145, respectively,4 the trend of
high numbers of settlements does not seem to be slowing down and pro-
vides incentive for pharmaceutical companies to have a clear understand-
ing of the options, terms, and avenues that are available for crafting a
successful resolution.
Table 1. ANDA Litigations Resolved by Settlement (2004–2013).
FY
2004
FY
2005
FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
FY
2011
FY
2012
FY
2013
Final
Settlements 14 11 28 33 66 68 113 156 140 145
Potential
Pay-for-
Delay
0 3 14 14 16 19 31 28 40 29
Final
Settlements
Involving
First Filers
8 5 11 16 29 32 49 54 43 41
Potential
Pay-for-
Delay
Involving
First Filers
0 2 9 11 13 15 26 18 23 13
Source:
FED. TRADE COMMN, OVERVIEW OF AGREEMENTS FILED IN FY 2013: A REPORT BY THE BUREAU OF
COMPETITION (2013).
2. See
FED. TRADE COMMN, OVERVIEW OF AGREEMENTS FILED IN FY 2010: A REPORT BY
THE BUREAU OF COMPETITION
(2010), http://www.ftc.gov/os/2011/05/1105mmaagreements.pdf
[hereinafter
FTC, 2010 AGREEMENTS
].
3. Id.
4. See
FED. TRADE COMMN, OVERVIEW OF AGREEMENTS FILED IN FY 2013: A REPORT BY
THE BUREAU OF COMPETITION (2013),
https://www.ftc.gov/reports/agreements-filled-federal-
trade-commission-under-medicare-prescription-drug-improvement [hereinafter FTC, 2013
AGREEMENTS].
dor54588_15_ch15_357-376.indd 358 5/5/16 5:43 PM

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