Pay-for-delay agreements, in which brand name drug companies pay generic drug companies to delay the marketing of the generic alternative, deny consumers access to more affordable alternatives to brand medications. Reports provide information that is critical understanding the impact of these deals on increasing prescription drug costs.

In a letter to Acting Chairman Ohlhausen, Klobuchar and Grassley request the dates on which the FY 2015 and 2016 reports will be released, in addition to the projected date for releasing the FY 2017 report; Release of the FY 2015 and 2016 numbers will help Congress understand whether the Court’s decision has altered the behavior of drug manufacturers and what legislative reforms are currently needed

WASHINGTON, D.C. – U.S. Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) have urged the Federal Trade Commission (FTC) to release its report on pay-for-delay agreements. The FY 2014 report found that there were over 20 potential pay-for-delay deals covering over $6 billion in prescription sales. In a letter to Acting Chairman Ohlhausen, Klobuchar and Grassley request the dates on which the FY 2015 and 2016 reports will be released, in addition to the projected date for releasing the FY 2017 report. Release of the FY 2015 and 2016 numbers will help Congress understand whether the Court’s decision has altered the behavior of drug manufacturers and what legislative reforms are currently needed.

“We write to request the prompt release of the fiscal year (FY) 2015 and 2016 staff reports on agreements filed with the Federal Trade Commission under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, as well as a timely release of the FY 2017 staff report,” the senators wrote. “The Fiscal Year 2014 report found that the number of potential pay-for-delay agreements had fallen after the Actavis decision, but there were still over 20 potential pay-for-delay deals covering over $6 billion in prescription drug sales. Release of the FY 2015 and 2016 numbers will help Congress understand whether the Court's decision has altered the behavior of drug manufacturers and what legislative reforms are currently needed.”

The senators continued, “It is for these reasons that we respectfully request that you provide the dates on which you will release the FY 2015 and 2016 reports, in addition to the projected date for releasing the FY 2017 report, within two weeks of this letter.”

In January, Klobuchar and Grassley introduced bipartisan legislation to crack down on anti-competitive pay-for-delay pharmaceutical deals. The Preserve Access to Affordable Generics Act would crack down on anti-competitive pay-offs in which branded companies pay their generic competitors not to compete as part of a patent settlement. These pay-off settlements (also known as “reverse payments”) delay consumer access to generic drugs, which can be as much as 90 percent cheaper than brand-name drugs. The legislation would stop this practice, save consumers billions in prescription drug costs, and reduce the budget by almost three billion dollars over the next decade.

Klobuchar and Grassley introduced similar legislation last Congress following a Federal Trade Commission report demonstrating that a significant number of potential pay-for-delay settlements continue to occur.

The full text of the senators’ letter is below.

Dear Acting Chairman Ohlhausen:

We write to request the prompt release of the fiscal year (FY) 2015 and 2016 staff reports on agreements filed with the Federal Trade Commission under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, as well as a timely release of the FY 2017 staff report.

Since 2004, the Federal Trade Commission (FTC) has released annual reports summarizing agreements between brand and generic pharmaceutical manufacturers, providing important information on the use of pay-for-delay provisions in patent dispute resolutions. These pay-for-delay agreements, in which brand name drug companies pay generic drug companies to delay the marketing of the generic alternative, deny consumers access to more affordable alternatives to brand medications.

This information is critical to understanding the impact of pay-for-delay agreements. We appreciate that you have been very supportive of the FTC's Pay for Delay enforcement, and the FTC's prior reports have contributed to the public's understanding of this issue. As we seek to address these anticompetitive practices through legislation, it is important that we have up-to-date numbers to inform our efforts.

This information will help us understand the impact that the 2013 Supreme Court case FTC v. Actavis has had on patent dispute resolution and the FTC's ability to stop these anticompetitive deals. Although the decision clarified that these agreements are subject to antitrust scrutiny, the FTC has brought only a few cases since that decision.

The FY 2014 report found that the number of potential pay-for-delay agreements had fallen after the Actavis decision, but there were still over 20 potential pay-for-delay deals covering over $6 billion in prescription drug sales. Release of the FY 2015 and 2016 numbers will help Congress understand whether the Court's decision has altered the behavior of drug manufacturers and what legislative reforms are currently needed.

It is for these reasons that we respectfully request that you provide the dates on which you will release the FY 2015 and 2016 reports, in addition to the projected date for releasing the FY 2017 report, within two weeks of this letter.

Thank you for your attention to this important issue. We look forward to working with you to protect consumers and encourage competition in prescription drug markets.

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