Lawmakers want crackdown on drug agreements that keep generics out

Democrats are looking at proposals to crack down on licensing agreements between drug companies that keep generic drugs out of the market, Politico reports. In the agreements, pharmaceutical companies pay generic manufacturers to "delay introduction of generic drugs, which are often cheaper than brand-name drugs. The issue surfaced during the long health care reform debate, given the potential savings to consumers and the government as a major purchaser of drugs. The industry lobby squashed that attempt. But both administration and House Democratic officials told Politico that it's being actively discussed now in a new effort to come up with $10 billion in spending cuts and savings to offset emergency assistance to local school boards this summer." The Federal Trade Commission says such "pay-for-delay" agreements "amount to collusion," but drug companies say the agreements are a way to avoid long legal battles over exclusivity in drug manufacturing.

"And in Congress, Sen. Herb Kohl (D-Wis.) won Senate Judiciary Committee approval last year of legislation to crack down on the practice — saving $1.8 billion for the government over the next 10 years, according to the Congressional Budget Office" (Rogers, 6/17).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.