WASHINGTON, D.C. – U.S. Senator Amy Klobuchar today highlighted a new report that underscores the need to pass their legislation that would crack down on anti-competitive pay-for-delay deals. The report, released today by Community Catalyst and U.S. Public Interest Research Group (U.S. PIRG), shows that people with cancer, heart disease, epilepsy and other conditions have been forced to pay an average of 10 times more than necessary for at least 20 critical drugs due to pay-for-delay agreements between brand and generic drug companies. Last month the Supreme Court ruled that pay-for-delay agreements are subject to antitrust scrutiny, but did not make the deals presumptively illegal. Klobuchar, the chair of the Antitrust Subcommittee, has introduced bipartisan legislation with Senator Chuck Grassley (R-IA) to make pay-for-delay agreements illegal. Klobuchar will also hold an Antitrust Subcommittee hearing to examine the legislation to combat these anti-competitive deals that hurt consumers.

“It’s simply outrageous that consumers are forced to pay higher prices for critical drugs because of these backroom pay-off deals,”said Klobuchar.“While the Supreme Court decisionwas a step in the right direction, our bipartisan legislation is needed to put an end to these harmful pay-for-delay agreements once and for all. Our legislation will help ensure Americans can get the drugs they need at the prices they can afford, and I look forward to the upcoming Antitrust Subcommittee hearing to examine how this problem continues to plague consumers and the need to take swift action to pass our legislation.”

Pay-for-delay settlements occur when brand-name drug companies seek to eliminate competition by paying generic manufacturers not to sell their products for a period of time. These agreements delay generic entry into the market nearly 17 months longer on average than agreements without payments. These pay-off settlements (also known as “reverse payments”) delay consumer access to cost-saving generic drugs, which can be as much as 90 percent cheaper than brand-name drugs.

Klobuchar and Grassley’s legislation—the Preserve Access to Affordable Generics Act—would help put an end to the practice of brand-name drug manufacturers using pay-off agreements to keep cheaper generic equivalents off the market and help make sure consumers have access to cost-saving generic drugs they need. Klobuchar and Grassley introduced similar legislation in 2010 following a resurgence of patent settlement agreements.

Specifically, the bill would make it illegal for brand-name drug manufacturers to use anti-competitive pay-off agreements to keep cheaper generic equivalents off the market.  The Congressional Budget Office (CBO) expects that enacting this legislation would accelerate the availability of lower-priced generic drugs and generate over $4.7 billion in budget savings to the Federal Treasury between fiscal years 2012 and 2021.