Senators Reintroduce Bill to Make Pay-For-Delay Deals Illegal

US Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) on Wednesday reintroduced a bill that would prevent branded and generic drug companies from forging deals that delay the launch of generics.

The reintroduced Preserve Access to Affordable Generics Act aims to increase consumers’ access to generic drugs by making the so-called pay-for-delay deals illegal. On average, pay-for-delay deals restrict access to generics by nearly 17 months, according to the senators.

The bill comes as the deals have been on the rise for the last decade but seem to have slowly tapered off in recent years. A 2014 report from the Federal Trade Commission (FTC) found 29 potential pay-for-delay settlements involving 21 different branded pharmaceuticals, with combined US sales of approximately $4.3 billion. That compares with a 2013 FTC report that found at least 40 pay-for-delay settlements.

Generic and branded companies have argued that the agreements are beneficial to all parties, including taxpayers, because they bypass costly litigation and allow for generics to launch in about the same time as they would without the deals. The Generic Pharmaceutical Association has said the settlements could actually bring a generic to market sooner than they otherwise would, and that the "win" rate for patent litigation was only about 50%.

The FTC, however, has said the agreements are anti-competitive and delay the introduction of generics, thus keeping costlier medicines on the market for longer.

The Supreme Court in 2013 took more of a nuanced stance, ruling that the deals may be anti-competitive under the law, though they are not presumed to be by default.

Klobuchar and seven cosponsors previously introduced the bill in 2013, though it failed to make it out of committee.

"Pay for delay deals keep drug costs artificially high for consumers and the taxpaying public. These agreements disrupt the current law that was put in place to speed generic drugs getting to the market.  In addition, they force consumers to pay more for their medicines, and add an exorbitant burden to the deficit,” Grassley said.  “The FTC has kept the pressure on, but Congress should act to end these twisted litigation settlements.”