Klobuchar and Grassley have introduced bipartisan legislation to help put an end to the practice of brand-name drug manufacturers using pay-off agreements to keep more affordable generic equivalents off the market
WASHINGTON, DC – U.S. Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) released the following statements after the Federal Trade Commission (FTC) filed a complaint in federal district court against several pharmaceutical companies allegedly involved in anti-competitive pay-for-delay deals. This is the first complaint filed since the Supreme Court ruled on the pay-for-delay issue in 2013. Klobuchar and Grassley have introduced bipartisan legislation to help put an end to the practice of brand-name drug manufacturers using pay-off agreements to keep more affordable generic equivalents off the market. A report released by the FTC shows the number of pay-for-delay agreements rose over 40 percent in 2012.
“We need to continue cracking down on these pay-for-delay deals that undermine competition and rob consumers of major savings,” Klobuchar said. “Today’s action by the FTC is an important step forward in that effort, and I’ll continue to do everything I can to pass this legislation and put an end to these anti-consumer deals so that people can have access to the affordable drugs that they need.”
“I appreciate the FTC paying close attention to these deals,” Grassley said. “The agency’s efforts can make a big impact on preserving generic drug competition, as well as protecting consumers from illegal conduct that delays their ability to purchase less expensive drugs. Market-distorting practices hurt consumers and taxpayers, and should be stopped.”
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.
The Preserve Access to Affordable Generics Act would make it illegal for brand-name drug manufacturers to use anti-competitive pay-off agreements to keep more affordable 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 over ten years.
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