After being tried by the court for 10 years, the reverse settlement transaction between generic drugs and brand-name pharmaceutical companies, known as “delayed payment” transactions, finally succeeded on Hill.
A “delayed payment” or “reverse payment” agreement is a transaction between a brand-name pharmaceutical company and a competitor’s generic or biosimilar company that enables them to avoid expensive patent litigation procedures through out-of-court settlements.
What makes them interesting and surprising is that the patent holder pays cash or provides something of value as a condition of settlement, instead of paying damages for generic drugs for infringing on the innovator’s patent.
Next week, the Senate Judiciary Committee will consider legislation to address this practice sponsored by Senator Amy Klobuchar (D-MN): Retention of Affordable Generic Drugs and Biosimilar Drugs Act (S. 1428)On Thursday, committee chairman Dick Durbin expressed his support for the bill.
Although policymakers found themselves too politically divided to take action on drug pricing under Trump’s leadership, they were more united in the pandemic this spring.A solid Eight bipartisan antitrust bills It has been launched, some of which have been signed or merged into administrative actions.
Congress is still considering the proposed legislation to curb the settlement that the Federal Trade Commission has been debating for a long time. Only serve Expand the brand monopoly and fill the general treasury at the expense of consumers and taxpayers.
July 13, the Senate Judiciary Competition Policy, Antitrust and Consumer Rights Subcommittee Hear testimony Because it considers how to best adjust these laws.
“I believe that if we submit it to the Senate in any way, we will complete it,” Klobuchar She said when she opened the floor At the hearing on July 13.
Voters across the country have been asking their congressional representatives to take action to reduce the high prices of drugs such as Humira, EpiPen and insulin products. The manufacturers of these drugs, AbbVie, Pfizer and Sanofi, have been accused of engaging in lucrative reverse settlement deals.
In 2019, California became the first state to ban this practice. The then California Attorney General (current Secretary of the Department of Health and Human Services) Xavier Becerra defend It fended off legal attacks by the Association for Accessible Medicine (AAM), and at the same time received a settlement of US$70 million from the company that was accused of the behavior that year.
However, there are disagreements over the scope of these settlements and how to determine whether their impact on drug consumers and the entire US pharmaceutical industry is positive or negative, and federal action is hindered.
On July 9, President Joe Biden signed a Executive order Oppose this approach, arguing that companies use it to avoid competition, raise prices, and stifle innovation. Biden suggested that the Federal Trade Commission prohibit the payment of delays in accordance with regulations, which would avoid the need for Congress to take action.
Of course, the pharmaceutical industry lobby groups hope to maintain the status quo of such transactions.
PhRMA CEO Steve Ubl immediately responded to Biden’s administrative actions, saying that Americans have benefited from “the most competitive prescription drug market in the world.”
It remains to be seen how much impact Biden’s EO will have.Sidley Austin partner recent think:”Some [Biden’s] The proposals may be inconsistent with existing statutory and regulatory agencies, and if these proposals are finalized and implemented, they may trigger litigation. “
Congressional testimony seeks bipartisan compromise
On July 13, the Senate Judiciary Subcommittee heard different views to find a solution to the problem of high drug prices. When it comes to “paying for the delay,” some support the solution proposed by Klobuchar and Iowa Republican Senator Chuck Grassley, while others want Congress to return to the drawing board. .
Rachel Moodie is the vice president of patents and law at Fresenius Kabi, a company that produces injections, biosimilars, and other medical products. testify The American brand-name pharmaceutical industry has failed to play the role of the free market. already have”A kind Institutional Change thus Brand-name drugs the company He hasAnd misused patent and rebate program to maintain monopoly Exceed drug for 20 year or more, Long after these drugs Yes Considered InnovationTemplate,“She complained and asked Congress to remedy this.
In contrast, Alden Abbott, a senior researcher at the Mercatus Center at George Mason University Tell the senator Leave the reverse settlement to the antitrust enforcement agency. If there is no large-scale healthcare regulatory reform, the unfortunate result of any attempt to fix the legislation will be “Major competition distortions that hinder competition,” he argued.
PhRMA Legal Counsel Geoffrey Levitt agree The existing legal structure is balancing competition and innovation and should be ignored.
“ITon will Not suitable to include FTCe Substituting it Business judgment For the company the second——Guess the company on a retrospective basis, this may have It has a huge chilling effect on innovation, and even punishes behavior that is conducive to competition,” he testified.
The Supreme Court dealt with this issue in 2013 and issued a weak ruling in favor of the Federal Trade Commission. U.S. Federal Trade Commission v. Actavis The Supreme Court refused to support the FTC’s claim that reverse payment transactions are inherently anti-competitive, but instead told future courts to apply the antitrust “rule of reason” test to determine its market impact.
Reverse settlements are still under fire in court
Not surprisingly, the lawsuit continues.
A kind New class action The allegations against Takeda and Endo allege that the Japanese pharmaceutical giant and generic drug company Par Pharmaceutical (now part of Endo) participated in an anti-competitive patent settlement in 2014 that delayed Takeda’s constipation drug Amitiza’s generic alternative.
The complaint highlights another criticism of the reverse settlement with the first filer: it had a chilling effect on generic competitors who later fought for market access.
“When and anti-competitive agreements The first filter is in place, However, the conclusion of pursuing litigation isNot so attractive to later applicants,“Wrote in the complaint.
The lawyers and representatives of the plaintiff and the defendant did not respond to requests for comment.
Hidden in full view
recent the study Author: Robin Feldman, a well-known drug law professor at the University of California, Hastings, hinted that the practice of reverse settlement still exists, and that he took a lot of money out of Americans’ pockets.
Although academia and policy makers have spent decades referencing FTC’s 2003 estimate A new analysis by the Feldman Center for Innovation estimates that such transactions cost Americans 3.5 billion U.S. dollars each year, in fact at least $6.4 billion and $36 billion each year. This is twice to 10 times the number widely used by the FTC.
Feldman said in an email: “These findings bring greater urgency and provide further context for the bill before Congress and Biden’s call for a ban on’delayed payment’.”
Photo: Ligorko, Getty Images
