WASHINGTON -- Senator Chuck Grassley today said Congress should put a stop to the dramatic increase in sweetheart deals between brandname and generic pharmaceutical manufacturers that have delayed the entry of less costly medicines in the marketplace.
Grassley’s statement came as the Senate Judiciary Committee was holding a hearing on “Paying Off Generics To Prevent Competition With Brand Name Drugs: Should It Be Prohibited?”
Grassley has been a strong supporter of ensuring that consumers see generic drugs on the market as quickly as possible. He is a cosponsor of legislation that wouldprohibit brand name drug manufacturers from using pay-off agreements to keep cheaper generic equivalents off the market. This legislation is expected to be introduced again this Congress by Senators Herb Kohl, Patrick Leahy, Charles Schumer and Grassley.
In the 109th Congress, Grassley, Leahy and Senator Jay Rockefeller requested that the Federal Trade Commission study whether the practice of “authorized generics” could have a negative impact on competition for both blockbuster and smaller drugs, and ultimately result in less competition in the drug industry. “Authorized generics” are brand name drugs sold under the label of a generic drug.
Grassley is also the author of legislation, with Leahy, which requires that a brand name company and a generic company that enter into an agreement related to the 180-day exclusivity period and concerning the manufacturing, marketing, or sale of either the brand name drug or its generic, then both companies must file a copy of any agreements with the Federal Trade Commission and the Department of Justice. This legislation, the Drug Competition Act, was included in the Medicare Modernization Act which was signed into law in 2003.
Here is a copy of Grassley’s prepared statement from today’s Judiciary Committee hearing.
Prepared Statement of Senator Chuck Grassley of Iowa
Senate Committee on the Judiciary
“Paying Off Generics To Prevent Competition With Brand Name Drugs:
Should It Be Prohibited?”
Wednesday, January 17, 2007
Chairman Leahy, I’m pleased that you’re holding this hearing today. We should be doing all that we can to see that the American consumer has access to lower priced drugs as soon as possible. Recently, there has been a dramatic increase in sweetheart deals between brand name and generic pharmaceutical manufacturers that delay the entry of less costly medicines in the marketplace. The Federal Trade Commission took the position that these settlement agreements violate antitrust law and the intent behind the Hatch-Waxman law. But the courts came to the conclusion that there wasn’t a problem.
I agree with the Federal Trade Commission that these agreements aren’t competitive. I agree with the Commission that these kinds of arrangements only end up keeping drug costs high for consumers. Furthermore, these kinds of deals threaten the long term sustainability of federal healthcare programs, such as Medicare and Medicaid.
So I joined Senator Kohl, Chairman Leahy, and several other Senate colleagues in introducing legislation that would ban these kinds of agreements. I know that a number of people have concerns with the way the bill is drafted, and I’m certainly open to looking at possible modifications to the language. However, I firmly believe that we need to pass legislation to put a stop to these agreements that only harm consumers.
I urge the Commission to continue looking for anti-competitive agreements in the drug industry and taking aggressive action to protect the American public. I commend the Federal Trade Commission for its hard work in this area. Mr. Chairman, I look forward to hearing the testimony today, and to working with you to ensure that prescription drug competition is not hampered by these abusive deals.
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