• 23
  • November
    2011

A new bill sponsored by Senator Jeff Bingaman would make it easier for generic drug manufacturers to get drugs on the market. The bill would amend the Hatch-Waxman Act of 1984, which allowed generic drug companies to challenge pharmaceutical patents considered to be weak. Under that law, generic drug makers who won such a challenge would have a 180-day period of time to sell a generic version with exclusivity.

One negative result of the law, however, was that settlements in patent suits sometimes ended up with generic companies staying out of the market for a period of time, with no other generics companies able to step into the drug market.

According to sources, brand-name companies will pay the generic company that initiated the patent challenge to delay production of a generic version. These types of transactions are termed "pay for delay" by the Federal Trade Commission. The agency has been battling these kinds of deals, calling them a violation of antitrust law, and reported that there were 28 of them in 2011. The agency's success in opposing these deals has, however, been mixed.

The new Bingaman bill was conceived as a response to this unintended flaw in the current law. It would allow any generic drug manufacturer able to challenge a drug patent to enter the market. The hope is that this will allow other generic companies to participate in the market.

Generic drugs cost up to 90 percent less than brand-name drugs, making them an affordable alternative to brand-name versions. Generic drugs, according to the FDA, are generally as safe and effective as brand name versions, and have the same risks and benefits. They should be treated with the same amount of caution.

Source: Reuters, "Senate bill to encourage generic drug market," Diane Bartz, November 15, 2011.