Patent settlements between brand-name pharmaceutical companies and generic/biosimilar manufacturers have generated substantial healthcare savings while accelerating patient access to lower-cost medicines, according to a comprehensive analysis by the IQVIA Institute for Human Data Science. The study, commissioned by the Association for Accessible Medicines (AAM) and its Biosimilars Council, found that these agreements have saved the U.S. healthcare system $423 billion since the FTC v. Actavis decision in 2013.
Significant Acceleration of Market Entry
The analysis examined 288 molecules with first generic or biosimilar launches between 2014 and the third quarter of 2024. Of these, 84 molecules had settlements that resulted in early market entry, with launches occurring an average of 64 months—approximately five years—before original patent expiration.
The data reveals striking patterns in market acceleration: 29% of studied molecules saw generic or biosimilar entry between one and five years prior to patent expiration, while 30% experienced entry five to ten years ahead of schedule. Most remarkably, 17% of settlements accelerated generic or biosimilar entry by more than a decade before patent expiry.
"The ability for generic and biosimilar manufacturers to procompetitively settle with brand-name drug manufacturers creates significant savings and efficiencies and brings lower-cost medicines to patients years earlier," said John Murphy III, president and CEO of AAM.
Case Study: Teriflunomide Success
The report highlighted teriflunomide, a multiple sclerosis treatment, as a prime example of settlement benefits. A 2017 settlement with multiple generic abbreviated new drug application filers enabled generic launch 11 years before the anticipated patent expiry. This early entry alone generated an estimated $1.1 billion in healthcare system savings in 2023.
Across all molecules studied, the 84 settlements brought products to market a combined total of 5,365 months earlier than would have occurred without agreements. The average savings to the healthcare system per molecule reached approximately $5 billion, though the analysis found no strong correlation between the magnitude of healthcare savings and how early generic or biosimilar entry occurred.
Regulatory and Supply Chain Challenges
Despite the overall success of settlement strategies, the study identified instances where regulatory hurdles and supply chain issues delayed market entry even after patent disputes were resolved. Four molecules with settlements—Welchol (colesevelam), Integrilin (eptifibatide), Aggrastat (tirofiban), and Istodax (romidepsin)—experienced launch delays primarily due to protracted FDA approval timelines or supply shortages for complex products.
These cases underscore that while patent settlements can resolve legal barriers, other factors including regulatory processes and manufacturing complexities can still impede the swift availability of affordable medicines.
Industry Implications and Future Outlook
The research methodology involved utilizing the IQVIA SMART U.S. Launch and Regulatory Insights module to identify molecules and launch dates, with litigation and settlement details gathered from sources including the Ark Patent Intelligence Database, SEC filings, company announcements, and court decisions. Patent expiration information was cross-referenced using Orange Book and Purple Book databases, FDA approval letters, and patent intelligence databases.
Murphy emphasized the broader implications of these findings: "Efforts to severely limit patent settlements will hurt patients, cost billions of dollars, and exacerbate industry sustainability concerns in the generic medicines marketplace."
The AAM predicts that the industry will continue focusing on optimizing the relationship between legal settlements and efficient approval pathways to maximize benefits of earlier generic and biosimilar market penetration, thereby enhancing affordability and access to essential medicines.
