Senate bill would nix 180-day generics exclusivity

Here's one way to curb pay-for-delay patent settlements: Broaden the field of successful patent challengers. A bill set for introduction in the U.S. Senate would amend the Hatch-Waxman Act, which gives 6 months' exclusivity to the first generics maker that asks the FDA to approve a particular knock-off drug. No 180-day exclusivity, and more than one copycat product can jump onto the market as soon as patent law allows.

Hatch-Waxman was designed to encourage generics makers to challenge branded pharma's patents, as Reuters reports. The idea was that the 180-day exclusivity period--which can be worth many millions of dollars, depending upon the brand--would be a carrot for generic companies that might otherwise be reluctant to spend money and time on a patent lawsuit.

But Sen. Jeff Bingaman (D-N.M.) contends that the 180-day provision has spawned a trend that Hatch and Waxman never expected: Patent lawsuit settlements that keep cheaper generics off the market. "Everyone who's focused on this set of issues believes that there's a major flaw in the current law, unintended obviously," Bingaman told Reuters. "We think we have a solution to that flaw."

The Bingaman bill, also supported by Republican David Vitter, would allow any generic company that successfully challenged a branded drug's patent onto the market. So, rather than Ranbaxy Laboratories having 6 months to sell the only independent generic version of Pfizer's ($PFE) Lipitor, other companies with approved versions--such as Teva Pharmaceutical Industries ($TEVA) and Mylan ($MYL)--could launch, too. Striking pay-for-delay deals with any and every generics challenger would be quite a feat.

There's also legislation pending that would specifically ban pan-for-delay deals, which the Federal Trade Commission has been targeting for some time. The Bingaman-Vitter bill wouldn't only affect the deals FTC finds objectionable, however. It would affect every new generic drug. We'll have to wait and see what drugmakers have to say about the proposal--and whether the proposed legislation goes anywhere.

- read the Reuters news