Generic drug industry bemoans limits on patent settlements

The trade association representing generic drugmakers said Friday it was "extremely disappointed" by Senate appropriators' vote limiting their ability to receive cash settlements in patent disputes. The provision passed by a vote of 15-15 Thursday afternoon.

The Generic Pharmaceutical Association (GPhA) said in a statement that "patent settlements create competition and competition means more savings and greater access for consumers. Settlements guarantee generic drugs reach the market before patents expire, providing billions of dollars in additional savings to consumers, taxpayers and the health care system."

The industry group singled out Sens. Arlen Specter (D-Pa.), Frank Lautenberg (D-N.J.), Ben Nelson (D-Neb.) and Barbara Mikulski (D-Md.) for their "valiant efforts on behalf of consumers."

"We are encouraged that a growing number of members of Congress are taking a closer look at the language and recognizing that a ban on settlements is a ban on pro-consumer access to medicines and the tremendous savings that results," the statement said. "We applaud Senators on both sides of the aisle who voted to strike the provision during the mark-up."

The "pay-for-delay" provision was championed by Sens. Herb Kohl (D-Wis.) and Chuck Grassley (R-Iowa). It would allow settlement agreements only when the drug companies can prove to a judge by clear and convincing evidence that the deal won't harm competition.

The Congressional Budget Office says the provision would save the government about $2.5 billion over 10 years. And the Federal Trade Commission has estimated it would save consumers at least $3.5 billion a year.