Senate panel approves 'pay-for-delay' drug provision

A provision limiting generic drugmakers' ability to accept money to settle patent disputes survived — barely — a challenge in the Senate Appropriations Committee Thursday afternoon.

By a vote of 15-15, the committee rejected an amendment by Sen. Arlen Specter (D-Pa.) stripping the provision from the Financial Services and General Government Appropriations bill. The provision, championed by Sens. Herbert Kohl (D-Wis.) and Chuck Grassley (R-Iowa), was included in the bill reported out of the subcommittee on Financial Services and General Government earlier this week.

"The cost of brand-name drugs rose nearly ten percent last year," Kohl said in a statement. "In contrast, the cost of generic drugs fell by nearly ten percent. At this time of spiraling health care costs, we cannot turn a blind eye to these anticompetitive backroom deals that deny consumers access to affordable generic drugs."

Kohl's bill, the Preserve Access to Affordable Generic Drugs Act, would save the government about $2.5 billion over 10 years according to the Congressional Budget Office. Furthermore, the Federal Trade Commission has estimated it would save consumers at least $3.5 billion a year.

Both the brand-name and generic drug industry oppose the bill.

The bill would still allow settlement agreements when the drug companies can prove to a judge by clear and convincing evidence that the deal won't harm competition.

The House passed the companion bill in March as part of its Supplemental Appropriations Act of 2010.

More in Regulation

FDA issues guidance for reusable medical devices linked to 'superbugs'

Read more »