LAWMAKERS SET TO REVIEW REVERSE PAYMENTS
The legalities and overall effect of special out-of-court settlements that result in lengthening the period of exclusivity for a brand drug by stalling generic entry are up for debate on Capitol Hill as members of the Senate Judiciary Committee plan to hold a hearing tentatively scheduled for next week, congressional sources say.
Last Thursday, Sen. Herb Kohl (D-Wis.), the incoming chairman of the Senate Antitrust, Competition Policy and Consumer Rights Subcommittee, introduced the "Preserve Access to Affordable Generics Act," a bill that would prohibit brand drug manufacturers from using out-of-court settlements known as reverse payments to delay generic entry into the market. Under such arrangements, brand drug companies offer generic firms cash incentives to not launch products that compete directly with the brand drugs.
Kohl "may be looking to explore with the panelists on how his bill will curb the act of reverse payments," Kohl spokesman Joe Bonfiglio said. "We are going to look at patent settlements and his comments will mainly focus on that bill."
Kohl, along with Sens. Patrick Leahy (D-Vt.), Chuck Grassley (R-Iowa) and Charles Schumer (D-N.Y.), introduced similar legislation last year, but no action was taken.
A spokesman for PhRMA, who said the group is expected to testify before the committee next week, did not provide details on what PhRMA will focus on.
In the past, PhRMA had expressed support for using reverse payments, saying such arrangements resolve costly and time-consuming patent litigation.