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Legislation To Prevent Companies From Delaying Start Of Generic Drugs To Market

Armen Hareyan's picture

Generic Drugs

Legislation that would prevent brand-name drug companies from payinggeneric drug makers to delay market entry of generic medications "hasstalled in Congress in the face of major lobbying by the drugindustry," the AP/Houston Chronicle reports. The bill, sponsored by Senate Judiciary Antitrust, Competition Policy and Consumer Rights SubcommitteeChair Herb Kohl (D-Wis.), would ban settlements known as "reversepayments" in which generic drug manufacturers receive something ofvalue for delaying market entry of drugs.
However, the measurewould allow generic and brand-name drug makers to enter into othertypes of agreements, such as compromising on the date a generic versioncan enter the market without a payment being made by the brand-namecompany to the generic manufacturer. In addition, some reverse paymentsettlements could be exempt under the law if the Federal Trade Commissiondetermines it would benefit consumers. Kohl proposed the bill duringthe last two sessions of Congress and a similar bill has beenintroduced in the House, but neither of the bills has come up for avote, the AP/Chronicle reports.

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An Associated Pressanalysis of lobbying reports for fiscal year 2007 showed that about 12generic and brand-name drug makers and industry trade groups spent$38.8 million on lobbying Congress, including on the Senate bill. The Pharmaceutical Research and Manufacturers of America in FY 2007 spent $19.5 million on lobbying, up $3 million from FY 2006, the analysis showed. The Generic Pharmaceutical Association for the first half of FY 2007 spent about $420,000 on lobbying expenses, and drug companies -- including Bayer, Schering-Plough, Pfizer and Teva Pharmaceutical-- contributed about $19 million. The lobbying reports do not specifyhow much money was directed to the reverse payment legislation.


Kohl said, "Lobbyists have a lot of influence in Washington," adding,"If we can just get this to a vote, it will be pretty hard for peopleto vote against it. A vote against this is a vote against consumers."FTC Chairwoman Deborah Platt Majoras in September at a House task forcehearing said, "Such settlements restrict competition at the expense ofconsumers, whose access to lower-priced generic drugs is delayed,sometimes for many years." However, generic and brand-name drug makersclaim such legislation would be "counterproductive," the AP/Chronicle reports.

PhRMASenior Vice President Ken Johnson in a statement said drug researchfirms spend billions of dollars to develop new medicines, and patentrights help the firms reclaim those investments and fund new research(Frommer, AP/Houston Chronicle, 11/13).

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily HealthPolicy Report is published for kaisernetwork.org, a free service of The HenryJ. Kaiser Family Foundation.