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Senior Citizen Politics
Senate Bill to Stop Pay-Offs that Delay Generic
Drugs Coming to Market
Key sponsor is Herb Kohl, new chair of Special
Committee on Aging
 January 26, 2007 A practice that has long
aggravated many senior citizens, struggling to pay for the prescription
drugs they need, may soon come to an end. A bill to "explicitly" prohibit
brand-name drug manufacturers from using pay-off agreements to keep less
expensive generic equivalents off the market was announced in the senate
by the new chairman of the Special Committee on Aging, Herb Kohl (D-WI).
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Members Named to Senate's Special Committee on Aging
No sign of activity on the committee Website but
chairman busy
January 26, 2007 The Democrats in the U.S. Senate
may be busy with legislation but they are slow on getting their new
committees in action, at least the Special Committee on Aging, which is
now chaired by Democrat Herb Kohl, 71, of Wisconsin, who was the ranking
Democrat in the last congress. Both parties, however, have named the
members to the committee. Gordon Smith of Oregon, the former chairman,
will be the ranking Republican. Read
more...
Wisconsins Senator Herb Kohl to Become Chair of
Senate Special Committee on Aging
71-year-old senior citizen will also have other
heavy duty in new Congress
November 19, 2006 A fellow senior citizen is in line to take over the
chairmanship of the U.S. Senate Special Committee on Aging.
Read more...
Read more
on
Politics for Senior Citizens |
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Kohl, who is also chairman of the
Antitrust, Competition Policy and Consumer Rights subcommittee of
the Senate Judiciary Committee, was joined by Judiciary Committee
chairman, Patrick Leahy (D-VT), Chuck Grassley (R-IA), Charles Schumer
(D-NY) and Russ Feingold (D-WI) to announce the introduction of the
"Preserve Access to Affordable Generics Act."
Leahy held a hearing last week to examine the
issue. Federal Trade Commissioner Jon Leibowitz and former-Congressman
Billy Tauzin, now CEO of Pharmaceutical Research and Manufacturers of
America (PhRMA), were on hand to discuss the impact these agreements
have on the pharmaceutical market.
"When big brand-name drug companies pay generic
manufacturers to stop generic drugs from reaching pharmacy shelves,
consumers lose big-time," Kohl said. "We can't say we care about the
high cost of prescription drugs while turning a blind eye to backroom
deals between brand and generic drug companies. This practice has got to
stop."
Leahy said, "Some drug firms have colluded to pad
their profits by forcing consumers to pay higher prices than they would
pay for lower-cost generics. Now that this sweetheart dealing has been
uncovered, we owe it to consumers to end it. Our bill is a clear-cut
opportunity to remove an impediment to competition that prevents the
marketplace from working as it should -- to benefit consumers, and not
just the drug companies."
In 2005, two appellate court decisions overturned
Federal Trade Commission's (FTC) long-standing position against this
practice and upheld settlements that include such pay-offs. Last year's
Supreme Court dismissal of the FTC's latest appeal prompted lawmakers to
introduce this important bill.
"Recently, the dramatic increase in wheeling and
dealing between brand name and generic pharmaceutical manufacturers have
only ended up delaying the entry of less costly medicines in the
marketplace, leaving the bill to the consumer. These deals also threaten
the sustainability of federal health care programs, such as Medicare and
Medicaid. It's important that the Federal Trade Commission have as many
tools as possible in its arsenal to protect the American public from
these types of anti-competitive agreements," Grassley said.
"When consumers have access to lower-cost drugs, we
all win," Schumer said. "But as long as we let stand the appellate court
decisions that encourage brand and generic companies to split up the pie
between them and not give the consumer a fork, we are accepting higher
drug prices for the average American."
"The current high prescription drug prices take a
particularly heavy toll on sick and low-income individuals who
desperately need life-saving medicines. It is time for Congress to
ensure that a truly competitive marketplace for prescription drugs is in
place -- one that will help bring down the skyrocketing prices in this
country," Feingold said.
A FTC report found that in the six months following
the 2005 court decisions, there were three settlement agreements in
which the generic company received compensation and agreed to a
restriction on its ability to market the product. Additionally, the FTC
found that at least seven settlement agreements made in 2006 included a
pay-off from the brand manufacturer in exchange for a promise by the
generic company to delay entry into the market.
According to a study released last year by
Pharmaceutical Care Management Association (PCMA), health plans and
consumers could save $26.4 billion over the next five years by using the
generic versions of 14 popular drugs that are scheduled to lose their
patent protections before 2010.
Kohl and Leahy have also introduced S. 25, Citizen
Petition Fairness and Accuracy Act of 2007, legislation that prohibits
brand name drug companies from abusing the Food and Drug
Administration's (FDA) "citizen petition" review process.
In 2003, Senators Grassley and Leahy were able to
include their Drug Competition Act in the Medicare Modernization Act.
The Drug Act required companies such as Schering-Plough to report all
proposed deals with potential generic competitors, which were often
previously worked out in secret, to the federal antitrust law enforcers
- the FTC and the Justice Department.
Sen. Schumer is also the author of the Greater
Access to Affordable Pharmaceuticals Act with Senator John McCain
(R-AZ). The Schumer-McCain law, which was enacted in 2003, shut down
loopholes that drug companies created in Hatch-Waxman law, enabling
generic drugs to be brought to market sooner, and lowering the cost of
prescriptions for millions of Americans.
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