Echoing what it calls a "growing chorus of policymakers," the Generic Pharmaceutical Association (GPhA) has urged the congressional "super committee" on deficit reduction to nix a proposed legislative ban on pharmaceutical patent settlements.


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GPhA to super committee: Don't ban patent settlements

November 16th, 2011

WASHINGTON – Echoing what it calls a "growing chorus of policymakers," the Generic Pharmaceutical Association (GPhA) has urged the congressional "super committee" on deficit reduction to nix a proposed legislative ban on pharmaceutical patent settlements.

GPhA said Tuesday that such a policy — which targets so-called "pay for delay" deals — would curtail access to safe, effective and affordable generic drugs and shouldn't be adopted by the bipartisan Congressional Joint Select Committee on Deficit Reduction.

Last week, GPhA criticized a revised cost estimate by the Congressional Budget Office (CBO) on the Preserve Access to Affordable Generics Act (S. 27), a bill to ban brand-name drug makers from compensating generic drug companies to delay the entry of a generic medication into the market. The association said the CBO estimate was based on faulty assumptions and questionable data.

GPhA contends that patent settlements haven't delayed generic market entry beyond the date of the patent expiration and instead have made lower-cost generic drugs available months or even years before patents have lapsed. The association notes that generic manufacturers challenging a branded drug company's patents in court — to enable immediate market entry for their product — win their cases less than half the time they are pursued.

"The facts are crystal clear: Patent settlements save consumers and taxpayers billions of dollars," GPhA president and chief executive officer Ralph Neas said in a statement Tuesday. "The growing chorus of lawmakers urging the super committee to resist efforts to put a patent settlement ban into their recommendations offers further proof. Such a ban is bad public policy that would have a detrimental impact on the American public and eliminate billions of dollars in health care savings from our country."

This month alone, members of the House, Senate and the Federal Trade Commission have spoken out against a legislative ban on patent settlements, according to GPhA.

The association said that in a letter to the editor published last week, FTC Commissioner J. Thomas Rosch termed any projected savings from a ban on settlements as "inherently speculative" and stated that such a policy "should not be tacked onto any other piece of legislation."

Nine senators also have called on the super committee to avoid this legislation, acknowledging that the bill "disregards the fact that patent settlements in practice end expensive and protracted legislation, therefore allowing generic drugs to come to the market faster," GPhA reported.

In addition, GPhA cited a letter from Reps. Lamar Smith (R., Texas) and Bob Goodlatte (R., Va.), chairmen of the House Judiciary Committee and Subcommittee on Intellectual Property, respectively, that it said "laid bare the supposed savings" that a patent settlement ban would provide consumers and the U.S. health care system. "Not only does the bill make bad policy ... but claims that it might modestly reduce the deficit are highly doubtful," Smith and Goodlatte stated in the letter. "Indeed, we believe the bill is as likely to increase the deficit as decrease it."

The association stated, "Instead of concentrating their efforts on banning pro-consumer and pro-competitive settlements, GPhA urges lawmakers to focus on initiatives that promote, not hamper, consumer access to safe and effective generic drugs."

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