Chuck Grassley

United States Senator from Iowa

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Grassley, Klobuchar Introduce Bipartisan Bill to Crack Down on Anticompetitive Pay-for-Delay Deals

Dec 20, 2018

WASHINGTON – U.S. Sen. Amy Klobuchar of Minnesota and Sen. Chuck Grassley of Iowa are introducing new bipartisan legislation to limit anticompetitive pay-for-delay deals that prevent or delay the introduction of affordable follow-on versions of branded pharmaceuticals. The bill extends the reach of their prior legislation – the Preserve Access to Affordable Generics Act – to cover pay-for-delay deals affecting biosimilar and interchangeable biologics, in addition to the generic drugs already covered under the prior bill. Biologics are a fast-growing class of medicines that are more expensive than traditional pharmaceutical products. The use of “pay-for-delay” deals—the practice in which drug companies use pay-off agreements to delay the introduction of cheaper substitutes – could make some critical prescriptions unaffordable for patients and impose significant costs on our healthcare system.

“When brand-name, generic and biologic drug makers enter into agreements to keep more affordable medicines out of the marketplace, all of us are left to pay the price,” Grassley said. “Competition is critical to keep prescription drug prices low. Generics and biosimilar drugs are critical to treating a variety of serious illnesses. Our bill will curb the anti-competitive, pay-for-delay tactics that artificially inflate prices for patients.”                                                                                                                                                    

“Biologics play an important and growing role in treating many serious illnesses. Without competition, U.S. patients will likely see additional price increases on biologics in the years to come,” Klobuchar said. “This legislation will spur competition to drive down prices, helping to ensure patients can access the medications they need to improve their quality of life.”

Grassley and Klobuchar have long supported efforts to combat anti-competitive tactics in the pharmaceutical market. The senators are the lead sponsors of the Preserve Access to Affordable Generics Act, which would limit “pay-for-delay” deals in which brand-name and generic drug manufacturers use anti-competitive pay-off agreements to delay cheaper generic equivalents from reaching consumers. Earlier this Congress, Grassley and Klobuchar also introduced the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, which would address abuses and delay tactics that prevent generic companies from performing the necessary testing and distribution necessary for U.S. Food and Drug Administration (FDA) approval. The CREATES Act passed the Senate Judiciary Committee on June 14, 2018 on a strong, bipartisan vote of 16 to 5. The Congressional Budget Office (CBO) has estimated that the bill would result in almost $4 billion in savings.

In November 2018, Grassley and Klobuchar sent a letter to the sent a letter to the President urging him to support legislation to limit anticompetitive “pay-for-delay” pharmaceutical settlements as part of the Administration’s effort to bring down the skyrocketing price of prescription drugs. Full text of the letter can be found here.

In a June 2018 letter, Grassley and Klobuchar urged the Federal Trade Commission (FTC) to examine whether makers of biologic medicines are using strategies like “pay-for-delay” to hinder or delay biosimilars from entering the market. Full text of the letter can be found here.

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