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Kohl and Grassley Urge Super Committee to Save Billions by Encouraging Competition from Generic Drugs

Press Release

Location: Washington, DC

As the Joint Select Committee on Deficit Reduction works to adopt deficit reduction measures, Senators Herb Kohl and Chuck Grassley are urging the panel to include a bipartisan bill that cuts costs by encouraging competition from generic drugs.

The Preserve Access to Affordable Generic Drugs Act (S. 27) would deter "pay-for delay" settlements in which brand name drug companies settle patent disputes by paying generic drug manufacturers in exchange for the promise of keeping the generic version of the drug off the market. Under the bill, these anti-consumer pay-off agreements would be presumed illegal and the Federal Trade Commission (FTC) would be given the authority to stop the agreements.

"Keeping generic drugs out of the market costs taxpayers and consumers billions of dollars," Kohl said. "By ending these kinds of backroom deals, generic drugs will get to market sooner and prescription drug costs will go down."

"The wheeling and dealing that these companies take part in only hurts the pocketbooks of taxpayers. Our bill is a win-win for both the federal government and the consumer. It won't solve our fiscal problems, but every little bit helps," Grassley said.

The Congressional Budget Office estimated that the bill would save the federal government -- which pays approximately one-third of all prescription costs -- $2.68 billion over ten years. The president included a provision to end pay-for-delay settlements in his FY 2012 budget and estimated it would save the federal government $8 billion over ten years. The FTC estimated that ending these settlements would save consumers, who pay for prescription drugs through private insurance or on their own, $3.5 billion per year.

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