The Senate Judiciary Committee last week approved a bipartisan bill introduced by Sens. Herb Kohl and Chuck Grassley to limit pay-for-delay settlements that keep lower-cost generic drugs off the market.
The Preserve Access to Affordable Generic Drugs Act would deter the brand-name drug company practice of settling patent disputes by paying generic drug manufacturers in exchange for the promise that its generic version of the drug will be kept off the market. Under the bill, these agreements would be presumed illegal and the Federal Trade Commission would be given the authority to stop the deals.
“Generic drugs save billions of dollars and keeping them off the market only hurts consumers and taxpayers," said Kohl, D-Wis. "This is an important step in making sure that there’s no room in a competitive marketplace for these kinds of backroom deals."
"The wheeling and dealing between brand name and generic drug manufacturers simply lines the pockets of the manufacturers and costs taxpayers and consumers billions of dollars," said Grassley, R-Iowa. "Our bill would end this practice of pay-for-delay and ensure that cheaper medicines can be made available sooner rather than later."
The Congressional Budget Office estimated that the bill will save the federal government —which pays approximately one-third of all prescription costs — $2.68 billion over 10 years.
According to a study by the Pharmaceutical Care Management Association, health plans and consumers could save $26.4 billion over the next five years by using the generic versions of 14 popular drugs scheduled to lose their patent protections.
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