House Panel Limits Pay-For-Delay Deals

A panel of the House Energy & Commerce Committee has approved legislation to prevent "pay for delay" settlements of patent infringement lawsuits in which manufacturers of brand-name drugs pay potential generic drug competitors to stay out of the market. The Protecting Consumer Access to Generic Drugs Act (H.R. 1706) would ban nearly all settlements in which the brand company gives something of value to the generics manufacturer. Rep. Bobby L. Rush (D-Ill.), chair of the Commerce, Trade & Consumer Protection Subcommittee, says the bill "will save consumers billions of dollars from increased generic competition." But Republicans argue that limiting settlement options could force many more cases into lengthy litigation. The Federal Trade Commission (FTC), one of two U.S. agencies charged with enforcing the nation's antitrust laws, supports the proposal. "Stopping pharmaceutical companies from colluding with each other to delay entry of generic drugs, which sometimes cost 80 to 90% less than their brand-name versions, is a simple and surefire way to control costs," FTC Chairman Jon Leibowitz says.