Sen. Charles E. Schumer (D-N.Y.) introduced a bill (S. 3695) to amend the Federal Food, Drug, and Cosmetic Act to prohibit the marketing of authorized generic drugs. The bill was cosponsored by Sens. John D. Rockefeller IV (D-W.V.) and Patrick J. Leahy (D-Vt.). The effort is an attempt to ban a practice that they say undermines competition in the country’s $250-billion pharmaceutical market.

Authorized generics are brand pharmaceutical products re-branded as generics and aimed at discouraging generic companies from challenging questionable brand patents. Under federal law, the generic company that is first to successfully challenge a questionable brand patent, file an abbreviated new drug application (ANDA) with FDA and receive approval to market that drug product is awarded 180 days of marketing exclusivity. During the 180-day period, that generic company alone is permitted to compete with the brand company, allowing the generic to recoup costs incurred for undertaking a patent challenge.

Brand drug makers have figured out that by re-labeling their own product, they can compete directly against the generic during the 180-period. Authorized generics are considered brand products by the FDA, so the authorized generic does not have to go through the abbreviated approval process required by a true generic. Brand companies argue that authorized generics increase competition and lower prices, but the Federal Trade Commission (FTC) thinks differently.

The bill would amend Section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) by adding at the end the following:

Notwithstanding any other provision of this Act, no holder of a new drug application approved under subsection (c) shall manufacture, market, sell, or distribute an authorized generic drug, direct or indirectly, or authorize any other person to manufacture, market, sell, or distribute an authorized generic drug.

For purposes of this subsection, the term ‘authorized generic drug’ —

(A) means any version of a listed drug (as such term is used in subsection (j)) that the holder of the new drug application approved under subsection (c) for that listed drug seeks to commence marketing, selling, or distributing, directly or indirectly, after receipt of a notice sent pursuant to subsection (j)(2)(B) with respect to that listed drug; and

(B) does not include any drug to be marketed, sold, or distributed (i) by an entity eligible for exclusivity with respect to such drug under subsection (j)(5)(B)(iv); or (ii) after expiration or forfeiture of any exclusivity with respect to such drug under such subsection (j)(5)(B)(iv).

Expect to see more back-and-forth action in this high stakes game.

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