Despite various legislative and courtroom setbacks, FTC commish Jon Leibowitz insists there is reason to be optimistic that so-called pay-to-delay deals may soon be a thing of the past. In testimony this week before the House Committee on the Judiciary’s Subcommittee on Courts and Competition Policy, he appeared to see blue skies on his horizon and went so far as to say the ‘tide may be turning.’

For instance, he cited a recent ruling by the US Second Circuirt Court of Appeals, which actually upheld the legality of pay-for-delay deals, but at the same time, took the unusual step of inviting entities that purchase drugs and had challenged a particular deal to ask for that case to be reviewed by the full circuit, citing the “exceptional importance” of the antitrust implications (back story). And in what Leibowitz called “another promising development” last March, he pointed to a federal district court judge in Philadelphia, who denied a defense motion to dismiss an FTC case against Cephalon, which is now in the discovery phase (background).

Nonetheless, the FTC has not fared all that well lately in thwarting pay-to-delay deals, which the agency argues are anticompetitive. An effort to have a provision in the health care reform legislation to ban the deals was dropped at the last minute (see this) and the agency recently lost a case against Abbott Labs’s Solvay Pharmaceuticals unit for allegedly conspiring with several generic drug makers to delay competition for its AndroGel testosterone-replacement med (look here). And last week, the US Senate passed a bill without a House provision to restrict the deals (see here).

Last but not least, the FTC has been caught up in an embarassing controversy over its handling of an investigation into Watson Pharmaceuticals, whose ceo has accused the agency of abusing its power in attempting to stop a deal. The drugmaker claims the FTC harassed his company and used confidential FDA info to force Watson to strike a deal with Apotex. A federal judge ruled there was a “strong possibility” Watson may be correct. The FTC last week filed court papers denying the charge (take a look).

And so, Leibowitz concluded his remarks by acknowledging some harsh realities. “Solving this problem through the courts, however, will take time, and American consumers will suffer higher costs for prescription drugs. Therefore, even as we fight against pay-for-delay settlements in the courts, we are working to help find a legislative solution to the problem. Legislation would be the most effective way to stop these deals,” he plaintively stated. “We know the (Obama) administration supports a legislative fix as a critical part of President Obama’s health care plan, and the Commission will continue to work with Congress to address this issue. In the meantime, the agency will continue to aggressively pursue our investigations and enforcement actions.”

For now, though, Jon Leibowitz may be Don Quixote in disguise.