Senate Bill To Ban ‘Pay For Delay’ Introduced

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The Federal Trade Commission said in January that brand name drug firms reached agreements with generic manufacturers 40 times in the latest fiscal year, delaying the arrival of cheaper drugs to pharmacists’ shelves.

Key Democratic and Republican senators reintroduced legislation on Tuesday that would make it illegal for brand-name pharmaceutical companies to pay generic drug makers to keep their cheaper medicines off the market.

Such deals, in which brand-name drug companies resolve patent litigation with potentially infringing generic firms by reaching a settlement that delays a generic version of a drug in exchange for a payment, have angered U.S. and European antitrust enforcers for years.

Reuters reports the bill is sponsored by Senator Amy Klobuchar, a Democrat from Minnesota and the new chair of the Senate Judiciary Committee’s antitrust panel, and by Senator Chuck Grassley, a Republican from Iowa.

Similar bills, including one in 2010, have failed in part because of opposition from the drug industry, both branded and generic. It was not immediately known if a companion bill would be introduced in the U.S. House of Representatives.

The Federal Trade Commission said in January that brand name drug firms reached agreements with generic manufacturers 40 times in the latest fiscal year, delaying the arrival of cheaper drugs to pharmacists’ shelves. That was up from 28 the previous year and the highest since the FTC started tracking them.

The FTC has thus far had mixed success in fighting the pay-for-delay deals in court, but the issue could be coming to a head.

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