GPhA urges congressional super committee not to ban patent settlements

Group places ad in Wall Street Journal

WASHINGTON — The generic drug lobby is stepping up its efforts to persuade the congressional super committee to avoid adopting rules that would ban some patent settlements between branded and generic drug makers.

The Generic Pharmaceutical Association took out an advertisement in the Wall Street Journal that quoted several figures — including Federal Trade Commission commissioner J. Thomas Rosch and Sens. Frank Lautenberg, D-N.J.; Tom Carper, D-Del.; Bob Casey, D-Pa.; Kay Hagan, D-N.C.; and former Sen. Arlen Specter, D-Pa. — voicing opposition to FTC chairman Jon Leibowitz's efforts to ban the settlements.

"The facts are crystal clear — patent settlements save consumers and taxpayers billions of dollars," GPhA president and CEO Ralph Neas said. "The growing chorus of lawmakers urging the super committee to resist efforts to put a patent settlement ban into their recommendations offers further proof — such a ban is bad public policy that would have a detrimental impact on the American public and eliminate billions of dollars in healthcare savings from our country."

Neas also wrote a letter to Politico that criticized an op-ed on the site by Leibowitz and defended the settlements..

"Leibowitz would like readers to believe that these settlements harm consumers by driving up the price of prescription medicines," Neas wrote. "This is inaccurate. Indeed, settlements provide patients early access to lifesaving medicines months, and often years, before a drug's patent would have otherwise expired — giving consumers a break from more expensive brand products."

Under the Hatch-Waxman Act of 1984, a generic drug company that wishes to launch its version of a branded drug after the latter's market exclusivity period has expired but before its loss of patent protection, may file a regulatory approval application containing a paragraph IV certification, which asserts that the patent is invalid, unenforceable or that the generic won't infringe it.

In most circumstances, the branded manufacturer will sue the generic manufacturer for patent infringement. But usually, both companies will reach a settlement of some sort. In some cases, the settlement involves the generic drug company agreeing not to immediately launch a product in exchange for a payment, which sometimes includes cash but usually means that the branded drug manufacturer agrees not to launch a so-called authorized generic — essentially the branded drug marketed under its generic name at a reduced price — during the 180-day period in which the first company to win approval for the generic gets to compete exclusively with the brand manufacturer before the drug becomes commoditized, and any company can market a generic version.

It's these settlements that have the FTC and Leibowitz, as well as members of Congress, including Sens. Herb Kohl, D-Wis., and Chuck Grassley, R-Iowa, irked the most. The FTC said the deals cost consumers and taxpayers $3.5 billion per year because they result in delayed entry of cheaper generics into the market.

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