Pay-for-delay ban dropped from reform bill

Healthcare reform just started to look better for pharma: That ban on pay-for-delay deals has been dropped from the legislation. The provision would have barred patent settlements in which generics firms agree to hold off on their copycat-drug plans in exchange for something of value.

The Federal Trade Commission has been fighting the deals for some time, saying that they keep lower-cost generics off the market, costing taxpayers billions. Drugmakers, however, say that generics often make it to market more quickly under those arrangements. Generics firms often wouldn't bring patent challenges without the prospect of some negotiated settlement, the Generic Pharmaceutical Association (GPhA) tells the Wall Street Journal.

"Imposing a ban on patent settlements would have the unintended consequence of preventing pro-consumer settlements that would actually allow generic competition sooner than if the generic company had taken the case to its conclusion and lost--always a possibility in patent litigation. Sweeping the good settlements out with the bad settlements is simply bad health policy and a misguided approach to cost containment. Such an across-the-board ban would reduce the number of patent challenges brought by generics, creating an unnecessary hurdle to bringing lower cost generic drugs to the market," GPhA President and CEO Kathleen Jaeger says in a statement.

European antitrust officials have been on their own quest to stop pay-for-delay deals as well. Various antitrust investigations are under way involving generics deals made by GlaxoSmithKline, Teva Pharmaceutical Industries, and other big-name drugmakers.

And just because it's been left out of the reform bill doesn't mean a pay-for-delay ban isn't in the offing. Sen. Herb Kohl (D-WI), chairman of the Special Committee on Aging, plans to resurrect the idea after the reform fight is over.

- see the GPhA release [1]
- read the WSJ story [2]