In Issue 4, page 12, we discussed several legislative initiatives that were introduced during the last Congress which, according to their sponsors, were aimed at preserving or enhancing competition in the pharmaceutical industry. At the start of the 110th Congress, several of these bills were reintroduced.

The Preserve Access to Affordable Generics Act, which bans pharmaceutical patent settlements involving so-called reverse payments, was introduced in the Senate (S. 316) in January 2007 and in the House (H.R. 1432) in March 2007. The sponsoring senators characterized these agreements as “pay-off agreements” that are detrimental to consumers, and cited to a Federal Trade Commission (FTC) report that discussed the recent increased frequency in which companies are entering into these types of arrangements. The Senate bill cleared the Judiciary Committee on February 15, 2007. In addition on April 17, 2007, Rep. Rush, joined by Reps. Waxman, Markey, Butterfield, Doyle, Schakowsky, and Dingell, introduced H.R. 1902 in the Energy and Commerce Committee and the Judiciary Committee. This legislation also would prohibit so called “reverse payment” patent settlements. The language in H.R. 1902 differs from S.316 and H.R. 1432 by placing enforcement on the law solely with the FTC under the FTC Act (i.e., it does not provide a private right of action by amending the Clayton Act as did the previous Senate and House bills).

The Fair Prescription Drug Competition Act, which targets authorized generics, was introduced in the Senate (S. 438) in January 2007 and the House (H.R. 806) in February 2007. This proposed legislation would preclude an NDA holder “from manufacturing, marketing, selling or distributing an authorized generic drug or authorizing another party to manufacture, market, sell or distribute an authorized generic for that drug during the first-filer exclusivity period.”

Sens. Stabenow and Lott introduced the Lower Prices Reduced with Increased Competition and Efficient Development of Drugs Act (S. 1088) which is aimed at, among other things, curbing perceived abuses of the citizen petition process, pediatric exclusivity provisions, and the 30-month stay granted to a branded drug company that initiates litigation against the first ANDA filer. Earlier in the year, Sens. Kohl and Leahy introduced S. 25, which also attempts to reform the citizen petition process.

In a related development, the FTC recently presented testimony regarding the agency’s FY 2008 budget request. FTC Chairman Deborah Majoras signaled that the FTC would continue to devote substantial resources to competition in the pharmaceutical sector, including continuing to aggressively investigate settlements that include reverse-payments.