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Louis Jacobson
By Louis Jacobson March 9, 2012
Back to Prevent drug companies from blocking generic drugs

Legislation unlikely to be enacted this year

During the 2008 presidential campaign, Barack Obama promised to "prevent drug companies from blocking generic drugs from consumers." He was referring to curbing alleged anti-competitive practices by branded drug manufacturers in legal settlements they reach with generic drugmakers.

First, some background. Drug companies that develop new medications deemed safe and effective by the Food and Drug Administration are granted a period of market exclusivity, during which cheaper generic alternatives cannot be offered on the market. Once that exclusive period ends, generic copycat drugs may enter the market, and the price of the medications drops dramatically.

When we contacted both the Pharmaceutical Research and Manufacturers of America (the leading association for branded drugmakers) and the Generic Pharmaceutical Association (representing companies that make generics) the two groups agreed that what Obama was referring to was an effort to police patent lawsuit settlements more aggressively.

This has been proposed in each of Obama"s budgets, as recently as February 2012, but it has never advanced beyond that, said David Belian, a spokesman for the Generic Pharmaceutical Association.

It has also been proposed in a Senate bill sponsored by Herb Kohl, D-Wis. The bill would authorize the Federal Trade Commission to initiate a proceeding against parties to "any agreement resolving or settling, on a final or interim basis, a patent infringement claim, in connection with the sale of a drug." The bill also "establishes a presumption that any such agreement has anti-competitive effects and is unlawful if the filer of an abbreviated new drug (generic) application receives anything of value and agrees to limit or forego research, development, manufacturing, marketing, or sales of the generic drug for any period of time."

Since the bill was introduced in January 2011, it has been reported favorably by the Judiciary Committee but advanced no further. There is no House companion bill.

While the administration has continued to push this issue, the slim prospect of any bill passing both chambers of Congress in the remaining months of an election year makes us skeptical that it will be enacted during Obama"s first four years. If that changes, we"ll adjust our rating, but after failing to enact this proposal during more than three years in office, we rate this a Promise Broken.

Our Sources

Main index page for the Preserve Access to Affordable Generics Act in THOMAS

Email interview with David Belian, director of media relations with the Generic Pharmaceutical Association, March 9, 2012

Email interview with Kate Connors, director communications for the Pharmaceutical Research and Manufacturers of America, March 9, 2012