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Mr. VITTER. Madam President, I rise to strongly support the upcoming Bingaman-Vitter amendment, which is basically an amendment form that Bingaman-Vitter Fair Generics Act would stop an escalating trend in the drug industry which has pay-for-delay deals between a generic manufacturer and a big pharmaceutical manufacturer.
Over the last several years we have seen a huge increase, and we have seen this trend grow from modest to a raging trend, and it is anticompetitive. It is pay-for-delay deals in which the brand-name drug dealer pays off or settles with the first-to-file generic drugmaker, often restricting generic market entry for years into the future.
As prescription drug prices explode, they put real pressure and burdens on many Americans' budgets because they are making medications that should be more affordable in terms of coming onto the market. They are postponing those drugs, paying for the delay, and holding them off the market longer and longer.
The FTC has compiled data and made clear that this trend is happening, and the FTC, an official government agency, said:
The continued trends of record numbers of brands and generics resolving patent litigation prior to a final court decision [yields] significant numbers of such settlements potentially involving pay-for-delay.
Those were the FTC's words.
In 2004 the FTC had identified zero of those sorts of pay-for-delay deals. In 2006 it was up to 14. In 2011 it doubled to 28. Clearly it is a big trend. That is ``28 final settlements (that) contain both compensation to the generic manufacturer and a restriction on the generic manufacturer's ability to market its product.''
This fair generics bill, through this amendment, fixes the problem. That was the intent of the original Hatch-Waxman language, but there was a loophole that has been exploited in this pay-for-delay deal because the first filer is granted exclusivity even if the first filer is paid off and settles and doesn't pursue its ability to enter the market.
The Fair Generics Act would fix that, and it would basically outlaw that sort of marketing of generics. It would realign and reaffirm the incentive and reward not just for filing first but for successfully challenging and invalidating a patent. So we would move the first filing exclusivity to a reward for filing and also successfully invalidating a patent.
It is a realistic proposal. It would allow the first filer to follow through on that filing. It would encourage it, but also if that is not going to happen, it would allow subsequent filers to litigate and validate the patent and thereby gain ability to enter the marketplace.
I really think this was the intent of Hatch-Waxman.
Unfortunately, there is a loophole that has been exploited in Hatch-Waxman that has led to these serious pay-for delay cases. Again, this is an escalating trend that is still growing. I have no doubt that when we get the number for 2012, it is going to be significantly above the 2011 number of 28.
So to simplify it, if the first filer does not enter into a settlement with the restricted and delayed market entry date and if it does diligently challenge and invalidate a patent, nothing changes under present law. The current 6-month market exclusivity reward remains. So that incentive, that reward absolutely remains. However, if that doesn't happen and the first filer just wants to settle or park its filing and is generic, a subsequent filer would have the ability to step up and challenge the patent and, if it won, it would have market access.
This solution provides more litigation certainty. We propose basically a use-it-or-lose-it statute for the brand name to sue the generic within the 45-day window. Current law provides a brand manufacturer a 30-month stay if they sue the generic within the 45-day window but still allows a suit after.
So, again, I believe this is a reasonable and measured approach. This is not as Draconian or dramatic an approach as other proposals in the Senate. I believe this is the middle ground, and I believe this honors and gets us back to the original intent on this subject of Hatch-Waxman. But it is a measured response to this escalating trend that we clearly see, that the FTC has objectively identified and measured--a so-called pay-for-delay arrangement.
In conclusion, the goal of Hatch-Waxman was to bring generics to the market more quickly. This approach, the FAIR Generics Act, will do that. There are anticompetitive deals that are being struck more and more often--pay for delay--and they are becoming much more prevalent, and they are hurting American families.
The mega-lobbyist pharmaceutical industry, of course, opposes this reform because, quite frankly, those pay-for-delay deals are a way to buy more exclusivity and keep generics off the market longer. But that is not in the interests of the consumer. It is time to stand up to them. It is time to have some courage, to stand up to Big Pharma and say: We are going to preserve your exclusivity for developing a drug, but we are not going to let you buy off generics and unfairly extend that time period. We are going to let generics come to market in a reasonable time. We are going to create incentives to make sure that happens.
I urge all of my colleagues to support that proposal, which is embodied in the Bingaman-Vitter amendment, the FAIR Generics Act.
I yield the floor.
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