Senate bill aims to end legal deals restricting introduction of generics

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The chairman of the Senate Judiciary Committee plans to introduce legislation to prevent brand-name drugmakers from cutting legal deals with rivals restricting the introduction of generic drugs into the marketplace. The bill by Sen. Patrick Leahy, a Vermont Democrat, targets this increasingly used tactic of brand-name drug makers. Leahy said his bill has received support from several other senators, including Republican Charles Grassley of Iowa. “Congress never intended brand-name drug companies to be able to pay off generic companies not to produce generic medicines,” Leahy said at a Judiciary Committee hearing. “That would be a shame, harmful to consumers and a crime.” During the hearing, FTC Commissioner Jon Leibowitz testified that in fiscal year 2006 there were 14 patent settlements, in which a generic competitor received compensation and agreed to restrict the introduction of a new generic drug. That was double the number in fiscal year 2005, Leibowitz said. In one decision in 2005, an appeals court in Atlanta overturned an FTC ruling that said Schering-Plough had illegally kept cheaper versions of its blood pressure drug K-Dur off the market through patent settlement with generic competitor. The US Supreme Court turned down a petition to review the case last year. The FTC supports legislation to stop the settlements, Leibowitz said. Under federal law, drugmakers are allowed to seek FDA approval for generic versions of branded pharmaceuticals before a drug’s patent expires. They must certify that the patent is invalid or will not be infringed by the new generic version.
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