US FTC: drug patent kickback deals up by 60 pct

* FTC says deals cost consumers $3.5 billion per year

* Supreme Court has declined to rule on reverse payment

* As a senator, Obama opposed the deals

WASHINGTON, May 3 (Reuters) - Drug companies are increasingly striking deals with generic manufacturers to keep them from bringing cheaper drugs to market, according to a U.S. Federal Trade Commission staff report issued on Tuesday.

The number of these deals rose more than 60 percent to 31 in fiscal 2010, that ended Sept 30, from 19 in 2009. The 22 drugs involved had combined annual U.S. sales of about $9.3 billion, the FTC report said.

Generic drugs typically cost 20 to 30 percent less than name-brand medicines, and can be 90 percent cheaper, according to the agency.

"Collusive deals to keep generics off the market are already costing consumers and taxpayers $3.5 billion a year in higher drug prices," said FTC Chairman Jon Leibowitz.

The deals usually follow a threatened court fight after a generic drug maker plans to bring out a cheaper version of a drug. The FTC believes that deals that delay bringing a generic to market are illegal if the generic company is compensated for the delay.

The FTC has been battling the deals for years, taking some companies to court for making the agreements, with mixed success, and pushing for legislation that would specifically ban them. As a senator, President Barack Obama supported such legislation.

Last March, in a defeat for the agency, the U.S. Supreme Court refused to review a U.S. appeals court ruling that upheld the dismissal of a legal challenge to a deal between Bayer AG (BAYGn.DE) and Teva Pharmaceutical Industries Ltd's (TEVA.TA) (TEVA.O) Barr Laboratories. Bayer paid Barr in 1997 to prevent it from bringing to market a version of the antibiotic drug Cipro. (Reporting by Diane Bartz; Editing by Tim Dobbyn)