Welcome!

News Feed Item

New Analysis Finds All Economic Studies Of "Pay-For-Delay" Settlements Suffer From Common Flaw

Studies from FTC and others have predetermined conclusions and thus offer no guidance for courts in evaluating reverse payment settlements following FTC v. Actavis.

WASHINGTON, Feb. 20, 2014 /PRNewswire-iReach/ -- Three studies of the economic impact of "pay-for-delay" settlements, including an oft-cited Federal Trade Commission (FTC) report, share a methodological flaw that undercuts their usefulness to policymakers and courts alike, according to a new analysis conducted by economic consulting firm Matrix Global Advisors (MGA). Future consideration of pay-for-delay settlements between brand and generic drug manufacturers should rely instead on case-specific analytics based on proper valuation of terms, analysis of market dynamics, and rational differences between parties' risk aversion, among other factors.

(Photo: http://photos.prnewswire.com/prnh/20140220/MN67779)

Economic reports from the FTC, the IMS Institute for Healthcare Informatics, and U.S. PIRG and Community Catalyst purport to measure the impact of reverse payment settlements, but each reaches a different--even contradictory--conclusion. The FTC and U.S. PIRG/Community Catalyst reports find that such settlements prevent cost savings, while the IMS report finds that they induce cost savings.

According to MGA's new analysis, instead of establishing causality between pay-for-delay settlements and the date of generic entry, each report espouses a predetermined conclusion about whether pay-for-delay settlements yield savings by allowing generics to enter the market before brand patents would have expired, or deny savings by delaying generic entry beyond when generics would have entered the market following a successful patent challenge.

"These studies are well intentioned but fail to determine the aggregate impact of reverse payment settlements on consumer welfare," noted Alex Brill, CEO of MGA and one of the authors of the report. "More importantly, none of these studies offers guidance for the courts or the FTC in evaluating the appropriateness of any individual settlement agreement."

MGA's analysis concludes that a settlement involving consideration cannot be deemed pro- or anti-competitive without considering all aspects of the patent dispute and settlement agreement, as the Supreme Court acknowledged in its FTC v. Actavis decision by applying the "rule of reason."

According to MGA, the Supreme Court's decision is appropriate in its view that pay-for-delay settlements should be assessed on a case-by-case basis, as such settlements can be anti-competitive, pro-competitive, or neutral in their effects on consumers. Because the Court granted significant latitude to the lower courts in determining how to make this assessment, parties engaging in a reverse payment settlement will likely need to conduct a case-specific economic analysis that takes into account the various economic dynamics at play in that particular settlement.

ABOUT MGA

Matrix Global Advisors (MGA) is a Washington, DC-based economic consulting firm. MGA engages in consulting and analysis on a range of health care, tax, and other policy matters. Prior to founding MGA, Alex Brill served as policy director and chief economist to the House Ways and Means Committee and on the staff of the White House Council of Economic Advisers. Christy Robinson is a Director at MGA. She holds an MPP from George Mason University, where she received the Alexis De Tocqueville Award, and worked previously at the American Enterprise Institute, Nuclear Energy Institute, and Institute for Advanced Studies in Culture at UVA.

For media inquiries, please contact Jonathan Toomey at 202-558-7159.

Media Contact: Jonathan Toomey, Matrix Global Advisors, 202-558-7159, [email protected]

News distributed by PR Newswire iReach: https://ireach.prnewswire.com

SOURCE Matrix Global Advisors

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
Adobe is changing the world though digital experiences. Adobe helps customers develop and deliver high-impact experiences that differentiate brands, build loyalty, and drive revenue across every screen, including smartphones, computers, tablets and TVs. Adobe content solutions are used daily by millions of companies worldwide-from publishers and broadcasters, to enterprises, marketing agencies and household-name brands. Building on its established design leadership, Adobe enables customers not o...
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
WebRTC adoption has generated a wave of creative uses of communications and collaboration through websites, sales apps, customer care and business applications. As WebRTC has become more mainstream it has evolved to use cases beyond the original peer-to-peer case, which has led to a repeating requirement for interoperability with existing infrastructures. In his session at @ThingsExpo, Graham Holt, Executive Vice President of Daitan Group, will cover implementation examples that have enabled ea...
Apache Hadoop is a key technology for gaining business insights from your Big Data, but the penetration into enterprises is shockingly low. In fact, Apache Hadoop and Big Data proponents recognize that this technology has not yet achieved its game-changing business potential. In his session at 19th Cloud Expo, John Mertic, director of program management for ODPi at The Linux Foundation, will explain why this is, how we can work together as an open data community to increase adoption, and the i...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Tintri VM-aware storage is the simplest for virtualized applications and cloud. Organizations including GE, Toyota, United Healthcare, NASA and 6 of the Fortune 15 have said “No to LUNs.” With Tintri they mana...
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.
Businesses are struggling to manage the information flow and interactions between all of these new devices and things jumping on their network, and the apps and IT systems they control. The data businesses gather is only helpful if they can do something with it. In his session at @ThingsExpo, Chris Witeck, Principal Technology Strategist at Citrix, will discuss how different the impact of IoT will be for large businesses, expanding how IoT will allow large organizations to make their legacy ap...
24Notion is full-service global creative digital marketing, technology and lifestyle agency that combines strategic ideas with customized tactical execution. With a broad understand of the art of traditional marketing, new media, communications and social influence, 24Notion uniquely understands how to connect your brand strategy with the right consumer. 24Notion ranked #12 on Corporate Social Responsibility - Book of List.
Major trends and emerging technologies – from virtual reality and IoT, to Big Data and algorithms – are helping organizations innovate in the digital era. However, to create real business value, IT must think beyond the ‘what’ of digital transformation to the ‘how’ to harness emerging trends, innovation and disruption. Architecture is the key that underpins and ties all these efforts together. In the digital age, it’s important to invest in architecture, extend the enterprise footprint to the cl...
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...