U.S. Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) today issued the following statements regarding today's decision by the U.S. Supreme Court in FTC v. Activas, Inc. which held that pay-for-delay agreements between brand and generic drug companies are subject to antitrust scrutiny. Klobuchar, the chair of the Judiciary Antitrust Subcommittee, and Grassley, the ranking member of the Senate Judiciary Committee, recently introduced legislation to crack down on pay-for-delay settlements.
"The Supreme Court's opinion confirms what we have been saying all along--that pay for-delay deals are anti-consumer, anti-competitive and are in contrast to antitrust law. Brand companies win by thwarting competition, generic companies win by getting huge payments to stay off the market, and consumers lose out on billions of dollars in cost savings from cheaper generic drugs. The Court goes a long way towards addressing these concerns, but our legislation goes even further to ensure Americans have access to the drugs they need at the prices they can afford, and I'll continue push to ensure consumers have access to a competitive prescription drug marketplace," Klobuchar said.
"Consumers and taxpayers lose out on hundreds of millions of dollars in prescription drug savings every year because of pay-for-delay agreements. The action by the Supreme Court is a good step toward putting an end to this kind of anti-competitive behavior. Consumers should have access to the less expensive generic drugs they need as soon as possible. In the meantime, we'll continue to push our legislative remedy to put consumers first," Grassley said.
Pay-for-delay settlements occur when brand-name drug companies seek to eliminate competition by paying generic manufacturers not to sell their products. These agreements can delay generic entry into the market nearly 17 months longer on average than agreements without payments. These pay-off settlements (also known as "reverse payments") delay consumer access to cost-saving generic drugs, which can be as much as 90 percent cheaper than brand-name drugs. Klobuchar and Grassley's legislation would make such practices presumptively illegal, and according to The Congressional Budget Office (CBO), would accelerate the availability of lower-priced generic drugs and generate over $4.7 billion in budget savings to the Federal Treasury between fiscal years 2012 and 2021.