Article by: JEREMY OLSON , Star Tribune Updated: January 12, 2012 - 9:41 PM

Senator says "pay-for-delay'' deals can keep cheaper generics off the market.

U.S. Sen. Amy Klobuchar is taking on the pharmaceutical industry over the problem of drug shortages -- charging that drugmakers limit production of low-profit medicines and sometimes pay manufacturers of generic drugs to keep cheap alternatives off the market.

Klobuchar gathered experts on the issue Thursday at Fairview Southdale Hospital in Edina, where patients such as Mary McHugh Morrison have struggled to obtain needed medications.

McHugh Morrison said shortages of the chemotherapy drug Doxil have at times delayed and complicated her treatment for peritoneal cancer.

"To hear the drug I was counting on to save my life wasn't available was terrifying," McHugh Morrison said.

Klobuchar is pressing legislation to reduce the number of drugs in short supply, which has tripled since 2005, from 61 to more than 200. One bill the Minnesota Democrat introduced would require faster notification by drug companies when shortages loom.

Reasons for shortages range from a lack of raw materials to financial decisions by companies to regulatory barriers that don't necessarily improve drug safety but do slow production.

"Whatever the cause, the results are clear and we see them time and time again with our patients," said Klobuchar, who held a similar event to highlight drug shortages last June.

Another concern Klobuchar cited is "pay-for-delay" deals in which brand-name drugmakers pay generic drug companies, often via lawsuit settlements, to keep cheaper generics off the market for a time.

A report by the Federal Trade Commission last summer noted 28 such deals in the last fiscal year and estimated that they delay the availability of generic drugs by 17 months.

At Thursday's event, FTC Chairman Jon Leibowitz called these "sweetheart deals" and the "most abusive practice in health care today," though he acknowledged that some courts have found them legal.

Drug companies argue that these deals actually eliminate legal battles that can delay the arrival of generics on the market. Inquiries to an industry spokesman were not returned Thursday afternoon.

A bill to stop such deals advanced through the U.S. House two years ago, Leibowitz said, and Klobuchar helped get it through the Senate Judiciary Committee. The Congressional Budget Office estimated that the bill could reduce federal deficits over the next 10 years by $2.67 billion, largely by making more generics available for the Medicare program for seniors.

Minnesota has supported other states in lawsuits against "pay-for-delay" arrangements, according to state Attorney General Lori Swanson, who also spoke Thursday. One, she said, targeted a brand-name company that used a $350 million payment to extend its monopoly on a drug and reap an extra $1.6 billion in profits.

Pay-for-delay tactics can aggravate overall drug shortages, said Stephen Schondelmeyer, an expert in pharmaceutical economics at the University of Minnesota. If generic drugmakers know they can reap multimillion-dollar settlements for trying to replicate top brand-name drugs, they'll feel no urgency to invest in needed but low-profit medications, he said.

At Fairview Health Services' cancer clinics, drug shortages have only worsened over the past year, said Darcy Malard Johnson, Fairview's oncology pharmacy program manager.

McHugh Morrison took to calling every friend and pharmacy she knew when her local provider ran out of Doxil. She generally found it, sometimes in other states, but once last summer she received a dose a week late. After progress in beating her cancer, one tumor started to grow back.

"It was a delayed dose," she said. "[My doctor] thinks that's why my tumor started to grow."