US House/Senate bills to curb generic pay-offs

The US House of Representatives and the Senate have launched bills tostop brand-name drugmakers paying off smaller generic rivals to prevent competition. The Senate's Drug Competition Act, S 754, is sponsored by Senator Patrick Leahy, ranking member of the Senate Judiciary Committee, while sponsoring House bill HR 1530 is Representative Henry Waxman, ranking member of the House Government Reform Committee and a senior member of the House Commerce Committee.

The bills seek to help the Federal Trade Commission and Department of Justice enforce existing antitrust laws more efficiently, by facilitating their confidential review of agreements between brand-name firms and potential generic competitors for the sale or manufacture of potentially-competitive generic equivalents of brand-name drugs. Where such deals could have the effect of limiting the generic's sales or its R&D, the firms would have to file texts of the deal with the FTC and the Attorney General within 10 business days of its execution, or pay a penalty of up to $20,000 per day.

The legislators say that paying smaller rivals to delay competition is an abuse of the Waxman-Hatch Act, and that the bills are a measured response to the problem of learning about improper deals in time to do something about them, while maintaining incentives for generics. They would not change Waxman-Hatch, amend FDA law or slow the drug approval process, and current FTC and DoJ confidentiality requirements would still apply.