Senate panel votes to end drug industry's practice of 'pay-to-delay' generics

The Associated Press: "In a defeat for the powerful drug lobby, a Senate panel approved legislation to prohibit drug companies from paying generic drug makers to delay bringing less costly products to market. … The measure would ban a 'pay-to-delay' practice — opposed by the [Federal Trade Commission] in a series of lawsuits brought since 2001 — in which brand-name drug companies and generic drug makers both profit. Brand-name drug makers get higher prices while the generic companies are paid to stay out of the market." The language was inserted into a spending bill in the FTC's budget and approved by the Senate Appropriations Committee (Taylor, 7/29).

The Wall Street Journal: "Under the legislation, a drug patent settlement would be presumed unlawful when a brand company pays a generic company to drop a patent challenge that could lead to early market entry of a competing generic medicine." Backers of the measure "say the drug settlements are anticompetitive and hold up the entry of low-cost drugs that could save consumers billions of dollars. Opponents say the drug settlements are pro-competitive because they often allow generic drugs on the market before a branded drug maker's patent ends, while also removing the uncertainty of patent litigation" (Kendall, 7/29).

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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.