Anti-Reverse Payment Legislation Introduced in the House

    By Donald Zuhn --

Last week, Rep. Bobby Rush (D-IL) (at right) introduced the Protecting Consumer Access to Generic Drugs Act of 2009 (H.R. 1706) in the House.  The bill, which was co-sponsored by Rep. Diana DeGette (D-CO), John Dingell (D-MI), Michael Doyle (D-PA), Edward Markey (D-MA), Janice Schakowsky (D-IL), Bart Stupak (D-MI), and Henry Waxman (D-CA), is similar to a bill (S. 369) introduced earlier this year in the Senate (see "Bill to Prohibit Reverse Payments Introduced in the Senate").  Like the Senate bill, the House bill is designed to prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market.  The House bill would accomplish this objective by making it unlawful to resolve or settle a patent infringement claim by entering into an agreement where "an ANDA filer receives anything of value," and "the ANDA filer agrees not to research, develop, manufacture, market, or sell, for any period of time, the drug that is to be manufactured under the ANDA involved and is the subject of the patent infringement claim."  Pursuant to provisions of both the House and Senate bills, a generic drug company found to violate the provisions of the Act would forfeit its 180-day exclusivity period.  Interestingly, the two bills have only found Democratic support.

Comments

[Matthew Avery]

Rather than making reverse payment settlements illegal, it would be more effective to just revise the Hatch-Waxman Act to remove the incentive to enter into such settlements. Pharmaceutical patent holders generally enter pay-for-delay settlements with the first generic challenger because these settlements bottleneck the generic process by preventing FDA from approving later-filed ANDAs. The 180-day exclusivity forfeiture provisions allow the first-filer to hold on to his exclusivity even after entering a pay-for-delay settlement, so long as the settlement doesn’t stipulate anything about the patent being invalid or not infringed. A simple change to the Hatch-Waxman Act - having the first-filer forfeit their exclusivity period upon entering ANY settlement agreement with the patentee - would open the door to other generic challengers and disincentivize patentees from entering into such settlements in the first place.