Congress Should Pass Legislation To Ban Agreements To Delay Market Entry Of Generic Medications, Editorial States

Sunday, January 28, 2007, 20:14
Pharma Industry
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Two “excessively lenient” court decisions have allowed agreements in which brand-name pharmaceutical companies pay generic pharmaceutical companies to delay market entry of their products, a “costly legal loophole that needs to be plugged” by Congress, a New York Times editorial states. According to the editorial, both brand-name and generic pharmaceutical companies “make out handsomely” from such agreements, but the “big losers are consumers and the public and private insurers that must continue to pay monopoly prices for the brand-name drugs.” Although the Federal Trade Commission “succeeded for several years in eliminating” such agreements, two appeals court decisions in 2005 “held that they are a legitimate way to resolve patent disputes,” and, as a result, the number of such agreements increased from three in 2005 to 14 in 2006, the editorial states. Pharmaceutical companies maintain that such agreements “are a reasonable way to resolve disputes and that they often result in bringing generic drugs to market before a patent has expired, albeit not as soon as the generic company wanted,” and that “regulators and the courts should judge such settlements on a case-by-case basis, according to the editorial. However, the editorial states, “Our own hunch is that the better approach for Congress to take as it moves toward corrective legislation would be a ‘bright line’ prohibition against making any payments to delay introduction of a generic drug,” adding, “That would set a clear standard and enhance the likelihood that consumers would get a chance to benefit from real competition in the pharmaceutical market” (New York Times, 1/24).

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