Among other provisions included in President Barack Obama’s (D) $3.7 trillion budget proposal is a plan to give biotech drugs seven years of market exclusivity rather than the 12 years already in effect. He has reportedly indicated that the change would reduce health care costs. According to news sources, industry watchers and representatives have criticized the proposal, claiming that it would seriously compromise the ability of biotech companies to recoup their investments and make them less inclined to invest in new drug development. European pharmaceutical interests reportedly expressed concerns that the EU would follow suit in an effort to ease government budgets and reduce health-care costs. They warn that changing the exclusivity period will hamper the development of new drugs.

The Obama administration has also proposed a prohibition on pay-to-delay agreements between brand-name drug makers and generics manufacturers, estimating that this would save $8.8 billion over the next 10 years. Under such deals, brand-name companies pay generic manufacturers that challenge a brand-name patent in exchange for withdrawing the challenge. The Generic Pharmaceutical Association is apparently calling limits on patent settlements “a misguided public health policy initiative.” See San Francisco Business Times, February 15, 2011; The Wall Street Journal, February 16, 2011; and The Boston Globe, February 19, 2011.