Pharmaceutical Lobbying Groups Stall Legislation That Aims To Prevent Companies From Delaying Introduction Of Generic Drugs To Market

Main Category: Pharma Industry / Biotech Industry
Article Date: 14 Nov 2007 - 6:00 PDT

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Legislation that would prevent brand-name drug companies from paying generic drug makers to delay market entry of generic medications "has stalled in Congress in the face of major lobbying by the drug industry," the AP/Houston Chronicle reports. The bill, sponsored by Senate Judiciary Antitrust, Competition Policy and Consumer Rights Subcommittee Chair Herb Kohl (D-Wis.), would ban settlements known as "reverse payments" in which generic drug manufacturers receive something of value for delaying market entry of drugs.

However, the measure would allow generic and brand-name drug makers to enter into other types of agreements, such as compromising on the date a generic version can enter the market without a payment being made by the brand-name company to the generic manufacturer. In addition, some reverse payment settlements could be exempt under the law if the Federal Trade Commission determines it would benefit consumers. Kohl proposed the bill during the last two sessions of Congress and a similar bill has been introduced in the House, but neither of the bills has come up for a vote, the AP/Chronicle reports.

An Associated Press analysis of lobbying reports for fiscal year 2007 showed that about 12 generic and brand-name drug makers and industry trade groups spent $38.8 million on lobbying Congress, including on the Senate bill. The Pharmaceutical Research and Manufacturers of America in FY 2007 spent $19.5 million on lobbying, up $3 million from FY 2006, the analysis showed. The Generic Pharmaceutical Association for the first half of FY 2007 spent about $420,000 on lobbying expenses, and drug companies -- including Bayer, Schering-Plough, Pfizer and Teva Pharmaceutical -- contributed about $19 million. The lobbying reports do not specify how much money was directed to the reverse payment legislation.

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Kohl said, "Lobbyists have a lot of influence in Washington," adding, "If we can just get this to a vote, it will be pretty hard for people to vote against it. A vote against this is a vote against consumers." FTC Chair Deborah Platt Majoras in September at a House task force hearing said, "Such settlements restrict competition at the expense of consumers, whose access to lower-priced generic drugs is delayed, sometimes for many years." However, generic and brand-name drug makers claim such legislation would be "counterproductive," the AP/Chronicle reports.

PhRMA Senior Vice President Ken Johnson in a statement said drug research firms spend billions of dollars to develop new medicines, and patent rights help the firms reclaim those investments and fund new research (Frommer, AP/Houston Chronicle, 11/13).

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