woodrow_wilson.jpgAs mentioned earlier, not only has the Federal Trade Commission has filed a complaint in federal district court challenging agreements by Solvay Pharmaceuticals, which paid generic drug makers to delay launching generic versions of Solvay’s brand name drug AndroGel (known as “reverse payments“), but Senate Judiciary Committee members Herb Kohl (D-WI) and Chuck Grassley (R-IA) have proposed the Preserve Access to Affordable Generics Act (S.396).”

The Act would prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market.  According to the Senate findings:

  1. prescription drugs make up 10 percent of the national health care spending but for the past decade have been one of the fastest growing segments of health care expenditures;
  2. 67 percent of all prescriptions dispensed in the United States are generic drugs, yet they account for only 20 percent of all expenditures;
  3. generic drugs, on average, cost 30 to 80 percent less than their brand-name counterparts; and
  4. the FTC found that 1/2 of the settlements made in 2006 and 2007 between brand name and generic companies, and over 2/3 of the settlements with generic companies with exclusivity rights that blocked other generic drug applicants, included a pay-off from the brand name manufacturer in exchange for a promise from the generic company to delay entry into the market.

The Act would amend the Clayton Act (15 U.S.C. 12 et seq.) by inserting after section 28 the following:

SEC. 29. UNLAWFUL INTERFERENCE WITH GENERIC MARKETING.

(a) It shall be unlawful under this Act for any person, in connection with the sale of a drug product, to directly or indirectly be a party to any agreement resolving or settling a patent infringement claim in which–

(1) an ANDA filer receives anything of value; and

(2) the ANDA filer agrees not to research, develop, manufacture, market, or sell the ANDA product for any period of time.

(b) Nothing in this section shall prohibit a resolution or settlement of patent infringement claim in which the value paid by the NDA holder to the ANDA filer as a part of the resolution or settlement of the patent infringement claim includes no more than the right to market the ANDA product prior to the expiration of the patent that is the basis for the patent infringement claim.

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Violators would forfeit their 180-day exclusivity period:

Section 505 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended by inserting `section 29 of the Clayton Act or’ after `that the agreement has violated’.

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