U.S. House Approves Restrictions on Deals Between Drugmakers
FTC Chairman Jon Leibowitz, testifies at a Senate Judiciary Committee hearing in Washington. Photographer: Joe Marquette/Bloomberg
The U.S. House approved a measure restricting the ability of drugmakers to enter agreements that the Federal Trade Commission has said keep generic medicines off the market.
Companies could be fined under the measure if the FTC and courts find they are involved in settlements that preserve a brand-name pharmaceutical firm’s patent by delaying a generic- drug maker’s introduction of a lower-priced product. The proposal, included in a war-funding bill that passed the House last night, now goes to the Senate.
The House action is “just another signal of the growing support in Congress for ending this unconscionable behavior by some pharmaceutical companies,” FTC Chairman Jon Leibowitz said in an interview before the vote.
Leibowitz has made restrictions on so-called pay-for-delay deals one of his priorities. Such payments are made by brand- name drug companies to makers of generics to postpone bringing generic products to market, he said.
The restriction was included in an amendment to the war- funding bill, approved on a 239-182 vote.
Drugmakers are lobbying against the provision, and passage in the Senate isn’t assured. At a June 9 hearing, Senators Orrin Hatch, a Utah Republican, and Arlen Specter, a Pennsylvania Democrat, said they were concerned the FTC campaign against the deals may discourage agreements that benefit consumers.
No Distinction
“This is sweeping legislation that doesn’t make a distinction between pro-competitive and anti-competitive settlements,” Debra Barrett, senior vice president of government affairs at Teva Pharmaceutical Industries Ltd., said in an interview.
The FTC contends brand-name companies often offer generic- drug manufacturers licensing rights on a product or other compensation in exchange for an agreement that delays the marketing of cheaper drugs.
The deals often help consumers, Barrett said. Teva, the world’s largest generic-drug maker, said yesterday in a statement that a recent deal allowed it to introduce a version of Wyeth’s antidepressant Effexor seven years earlier than the patent would have allowed. Companies have said the settlements save time and the cost of litigation.
The legislation gives drug companies 30 days to appeal an FTC ruling on any deal.
The measure would also help offset the $10 billion House Democrats added to the war-funding bill to prevent the layoffs of an estimated 140,000 teachers.
The Congressional Budget Office estimates the restriction on drug agreements would save the government $2.4 billion over 10 years by reducing the cost of drugs purchased through Medicare, Medicaid and other government programs, according to a Democratic summary of the bill.
The war bill is H.R. 4899.
To contact the reporter on this story: Jeff Bliss in Washington jbliss@bloomberg.net.
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