Pay-for-delay deals occur when brand-name companies pay generics companies challenging their patents to delay the introduction of lower-cost generics in return for a payment or payments from the originator company.

Senators Amy Klobuchar and Chuck Grassley have reintroduced the bill in an effort to put an end to this practice. They point to a US Federal Trade Commission (FTC) report from December 2014 that identified 29 potential pay-for-delay settlements involving 21 brand-name drugs with a combined US sale of about US$4.3 billion. They say pay-for-delay agreements can delay generics entry into the market by nearly 17 months.

The FTC has long been against pay-for-delay settlements and has previously stated that such deals cost ‘consumers and taxpayers US$3.5 billion a year in higher drug prices’ [1]. FTC Chairman Jon Leibowitz has also said that ‘the increasing number of these deals is a win–win proposition for the pharmaceutical industry, but a lose–lose for everyone else’ [2].

The original act was first introduced to Congress back in 2009 [3]. The current legislation would make it illegal for drugmakers to use anti-competitive pay-offs to keep generics off the market and is similar to a bipartisan bill they introduced with other legislators in 2013 that did not clear committee (S.214). The legislation goes beyond restrictions outlined in the Supreme Court decision in FTC versus Actavis by classifying all pay-for-delay deals as presumptively illegal, but allowing drugmakers to prove their deal is not anticompetitive.

The bill would also authorize the FTC to initiate a proceeding against parties to any agreement resolving or settling, on a final or interim basis, a patent infringement claim in connection with the sale of a drug. Penalties would include monetary penalties and loss of the 180-day exclusivity period for the marketing of a generic drug.

Senator Klobuchar’s office said the bill, which has not been assigned a number yet, is expected to go to the Judiciary Committee.

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References
1.   GaBI Online - Generics and Biosimilars Initiative. Pay-to-delay deals up by 60% in US [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Oct 2]. Available from: www.gabionline.net/Pharma-News/Pay-to-delay-deals-up-by-60-in-US
2.   GaBI Online - Generics and Biosimilars Initiative. US Senate panel votes to outlaw ‘pay-for-delay’ deals [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Oct 2]. Available from: www.gabionline.net/Policies-Legislation/US-Senate-panel-votes-to-outlaw-pay-for-delay-deals

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