The "Preserve Access to Affordable Generics and Biosimilars Act" aims to prevent anti-competitive agreements between brand-name and generic drug manufacturers that delay or block the availability of more affordable generic and biosimilar medications.
Amy Klobuchar
Senator
MN
The "Preserve Access to Affordable Generics and Biosimilars Act" aims to foster competition in the pharmaceutical market by preventing brand-name drug and biosimilar manufacturers from entering into anticompetitive agreements that delay or prevent the entry of generic drugs and biosimilars. It prohibits agreements where generic or biosimilar applicants receive compensation to limit competition, with certain exceptions, and empowers the Federal Trade Commission (FTC) to enforce these prohibitions. The Act also requires companies to certify that their agreements with generic drug or biosimilar manufacturers are complete and include all related terms and clarifies that forfeiture of the 180-day exclusivity period can occur if an agreement violates the Federal Trade Commission Act. Finally, the Act directs the FTC to submit a recommendation on a potential amendment regarding the exclusion of certain damage claims and sets a statute of limitations for enforcement proceedings.
Bill Targets Pharma 'Pay-for-Delay' Deals to Speed Up Cheaper Generics
This proposed legislation, the "Preserve Access to Affordable Generics and Biosimilars Act," takes direct aim at agreements between brand-name and generic drug companies that can keep lower-cost medications off the market longer. The core idea is to stop deals where a brand-name manufacturer essentially pays a potential generic competitor to delay launching their cheaper alternative, a practice often called "reverse payment" or "pay-for-delay." By amending the Federal Trade Commission (FTC) Act, the bill seeks to boost competition and ultimately lower prescription drug costs.
Cracking Down on Anti-Competitive Deals
The bill introduces a new section (Section 27) to the FTC Act, creating a strong legal presumption that these pay-for-delay agreements are anti-competitive and illegal. Here’s the gist: if a generic or biosimilar drug maker receives something of value (beyond certain exceptions) from a brand-name company and agrees to limit or postpone selling their competing product, that deal is flagged as problematic.
What counts as "value"? It could be cash, but also things like an exclusive license that benefits the generic company. However, the bill includes specific carve-outs. Deals aren't automatically flagged if the payment is only for legitimate services the generic company provides, or if the value is limited to things like letting the generic launch before the patent expires, or covering reasonable litigation costs (initially capped at $7.5 million and adjusted for inflation). The parties can also argue that the deal actually has pro-competitive benefits that outweigh the harms.
More Transparency and Tougher Enforcement
To make sure regulators know about these deals, the bill strengthens existing reporting requirements. Companies involved in settling patent disputes must file the entire agreement, including any side deals (even oral ones), with the FTC and the Department of Justice within 30 days. This aims to prevent companies from hiding the true nature of their settlements.
The FTC gets more power to act. The bill explicitly authorizes the agency to sue companies over these agreements in federal court, seeking potentially hefty penalties – up to three times the value the generic company received in the offending deal. Furthermore, a generic company found to have entered an illegal pay-for-delay agreement could lose its valuable 180-day market exclusivity period, a key incentive for generics to challenge patents in the first place (Section 6).
What This Could Mean for You
The goal here is straightforward: get cheaper generic and biosimilar drugs onto pharmacy shelves faster. Biosimilars, by the way, are like generics for complex, often expensive biologic drugs used for conditions like autoimmune diseases or cancer. When competition is delayed, patients, insurance plans, and government programs like Medicare end up paying brand-name prices for longer.
If this bill works as intended, speeding up generic entry could lead to significant savings on prescription drug costs down the line. Think about the potential impact on your co-pays or the overall cost of health insurance if generic versions of widely used medications become available months, or even years, sooner. The bill itself notes generics are typically 80-85% cheaper than their brand-name counterparts. While the focus is on stopping specific types of agreements, the ripple effect could mean more affordable access to necessary medications for everyone.