As Congress focuses on how to drive down drug prices, there is bipartisan
support for prohibiting reverse payment agreements, also known as
“pay-for-delay” arrangements. These arrangements involve a brand-name
pharmaceutical manufacturer paying one or more potential generic
competitors to delay bringing a generic to market as part of a resolution
to a patent infringement lawsuit. Although lawmakers have talked about the
issue for over a decade, the House Energy and Commerce Committee and the
House Judiciary reported legislation prohibiting these arrangements as part
of a larger drug package considered by the House of Representatives. The
legislation passed 234-183, by recorded vote.
- The House Energy and Commerce Committee passed by voice vote H.R 1499,
the “Protecting Consumer Access to Generic Drugs Act of 2019.” The
legislation, introduced by Rep. Bobby Rush (D-Ill.), also passed the House
Energy and Commerce Committee and House Judiciary Committee by voice votes.
- Lawmakers struck the most controversial aspect of the proposal — allowing
enforcement retroactively to June 17, 2013 — during the full Energy and
Commerce Committee’s consideration of the bill. During subcommittee
consideration, Republicans had voted against this proposal because of its
retroactive nature, saying they would support the bill if the retroactivity
were removed. A bipartisan amendment arose during the full committee markup
to eliminate the retroactive portion of the bill and to provide
the Federal Trade Commission (FTC) with flexibility to enforce arrangements
that the FTC felt would be anti-competitive or bad for consumers. That
amendment passed on a voice vote.
- Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa) introduced
similar legislation in the Senate. Bill S. 64, “The Preserve Access to
Affordable Generics and Biosimilars Act,” was referred to the Senate
Judiciary Committee, of which both are members. Klobuchar and Grassley
introduced similar legislation in the last Congress. This year’s
legislation is cosponsored by Sens. Patrick Leahy (D-Vt.), Joni Ernst
(R-Iowa) and Kevin Cramer (R-N.D.).
- The May 16 vote by the full House of Representatives is just the first
package of bills to be considered. The Energy and Commerce Committee is
preparing another bipartisan package, and the speaker of the House is
developing legislation concerning drug negotiations.
What appears evident is that some kind of “pay for delay” legislation is
likely to advance through Congress and become law in the near future.
Pharma companies, investors, lenders and other interested parties should
follow this legislation closely because of its potential impact on the
competitive risks associated with new drug development, and pay particular
attention to how such legislation treats retroactive application of prior
“pay for delay” arrangements. This topic is likely to evolve and elicit
much debate for the foreseeable future, including how retroactivity might
be applied to existing arrangements among competing branded and generic