Sen. Kohl Introduces Bill To Stop Generic Drug Payments

Senate Judiciary Committee members on Tuesday re-introduced a bill that would prohibit pharmaceutical companies from making payments to delay generic and cheaper versions of their drugs from reaching the market.

The bill comes a day after the U.S. Federal Trade Commission said it filed a lawsuit charging three drug makers with collaborating to postpone generic versions of a testosterone-replacement drug.

Generic drugs are essentially identical to brand-name drugs but are sold at a substantial discount, undercutting the market for the brand-name product. Pharmaceutical companies have resorted to making deals to pay companies to keep a generic drug off the market. Such moves have drawn criticism from Congress and consumer groups as it's widely believed generic drugs save consumers billions of dollars annually.

"It's time to stop these drug company pay-for-delay deals that only serve the profits of the companies involved and deny consumers access to affordable generic drugs," said Senate Judiciary Committee member Sen. Herb Kohl, D.-Wis. Senators Chuck Grassley, R.-Iowa, Russ Feingold, D.-Wis., Dick Durbin, D.-Ill., and Sherrod Brown, D.-Ohio, sponsored the legislation.

Kohl first introduced the bill last year. It's unclear what will happen with the bill, but President Barack Obama said during his campaign that he supported the legislation.

The FTC has asked Congress to crack down on these payments, saying they may end up costing consumers billions of dollars.

Monday, the FTC announced a lawsuit alleging that Brussels-based Solvay Pharmaceuticals Inc., the maker of the testosterone drug AndroGel, entered into an illegal agreement with generic drug companies Watson Pharmaceuticals Inc. (WPI) and Par Pharmaceutical Cos. (PRX) to delay the introduction of a generic competitor. Although the FTC has gone after these sort of agreements, it's unclear whether they are illegal as the Supreme Court hasn't ruled on the issue.

- By Jared A. Favole, Dow Jones Newswires; 202-862-9207; [e-mail]

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