"Prescription drugs can be a lifesaver for people who are sick. They can also be a budget-buster when they're needed on a long-term basis," Grassley said. "I want to make sure consumers in Iowa and across the country have access to the drugs they need at the lowest possible price."
Grassley said he learned about anti-competitive contracts between brand-name and generic drug manufacturers when the Federal Trade Commission took action against several manufacturers. Right now, the first generic drug manufacturer who wins permission to sell a generic drug ? before the patent on the brand-name drug expires ? receives temporary protection from other competition. This gives them a 180 day head start on other generic drug manufacturers.
Some companies had entered into secret deals where the generic drug maker claimed the 180 day grace period but withheld sales so the brand-name manufacturer would continue to control the market, in exchange for payment.
Grassley's bill, introduced with Sen. Patrick Leahy of Vermont, requires any drug company who enters into a 180-day agreement to file disclosure documents at both the Federal Trade Commission and the Justice Department. The Drug Competition Act also imposes monetary sanctions on any company that fails to notify.
The Federal Trade Commission conducted a comprehensive review of agreements that impacted the 180-day exclusivity period and found that there were competition problems with some of the agreements. The FTC has since recommended passage of the Drug Competition Act to help ensure a competitive market for drugs.
"Patent laws give drug companies incentives to research and develop innovative new medicines, while other laws ensure that generic drug companies can get into the market and offer more choices and lower prices. This balance must be maintained for consumers," Grassley said.
A similar bill passed the Senate last year, but was not considered by the House of Representatives. The Drug Competition Act will be referred to the Senate Judiciary Committee, of which Grassley is a senior member, for further consideration.