The U.S. House approved a measure Friday restricting agreements that allow brand-name companies to keep generic medicines off the market.
Until now, generic drugmakers have been allowed to delay placing cheaper drugs on the market in exchange for cash or other compensation, thereby extending the brand-name drug’s patent.
The Federal Trade Commission has made ending the practice, also known as “pay-for-delay,” one of its top priorities, saying it costs consumers and the government billions of dollars. The legislation instructs the FTC to pursue action against large pharmaceuticals and generic drugmakers when they’ve entered into such agreements.
Yesterday’s bill was “just another signal of the growing support in Congress for ending this unconscionable behavior by some pharmaceutical companies,” FTC Chairman Jon Leibowitz told Bloomberg News before the vote.
Drugmakers are lobbying against the bill as it heads to the Senate, and said the legislation can hurt consumers as much as it aims to help them, since it does not distinguish between agreements that reduce or promote competition.
Teva Pharmaceutical Industries Ltd., for example, the world’s largest generics maker, said in a statement that a recent patent settlement allowed the company to introduce a generic version of the antidepressant Effexor seven years earlier than the patent would have permitted.
The Congressional Budget Office estimates that the new restrictions would save the U.S. government $2.4 billion over 10 years by reducing the drug costs of medicines purchased through Medicare, Medicaid and other government health programs.
