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Policy

House Restricts 'Pay For Delay' Deals

by Glenn Hess
July 12, 2010 | APPEARED IN VOLUME 88, ISSUE 28

The House of Representatives passed legislation that limits “pay for delay” arrangements among pharmaceutical companies. Democratic lawmakers added an amendment to an emergency spending bill that bolsters the federal government’s ability to restrict payments made by brand-name drug companies to generic manufacturers in patent dispute settlements that effectively keep less expensive generic medicines off the market. The Federal Trade Commission (FTC) estimates that these deals cost consumers about $3.5 billion a year by delaying access to generic drugs. But the pharmaceutical industry argues that the cash settlements often benefit consumers. Teva Pharmaceutical Industries, the world’s largest maker of generic drugs, points out that a recent deal allowed it to introduce a version of Wyeth’s antidepressant Effexor seven years earlier than the patent would have allowed. Under the House bill, companies could be fined if FTC determines that they are involved in settlements that preserve a brand-name pharmaceutical company’s patent by delaying a generic drug company’s introduction of a lower-priced product. The amendment, included in a supplemental war-funding bill (H.R. 4899), now goes to the Senate.

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