This story was originally published in The Blog of Legal Times, an American Lawyer affiliate.
The new chair of the Senate’s antitrust subcommittee has reintroduced a bill to eliminate pay-off agreements to keep more affordable generic drugs off the market, carrying on with the fight that has waged in federal courts for years.
Senator Amy Klobuchar (D-Minn.) filed a bill with co-sponsor Senator Chuck Grassley (R-Iowa) that would prevent brand-name drug manufacturers from engaging in the increasingly common tactic to postpone cheaper generic drugs from release for years.
Klobuchar and Grassley introduced similar legislation in 2010 following a resurgence of patent settlement agreements. Now they cite a report released by the Federal Trade Commission that shows the number of potential pay-for-delay agreements increased more than 40 percent in 2012.
"I have long supported efforts to crack down on this behavior and the recent rise in pay-for-delay agreements underscores the need for legislation to help make sure people have access to the drugs they need at a price they can afford," Klobuchar said in a written statement.
The Congressional Budget Office anticipates the legislation would save the federal government $4.7 billion through 2021, Klobuchar said. Klobuchar was recently appointed as chair of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights.
Grassley is the ranking member of the judiciary committee.
The Federal Trade Commission has backed legislative efforts to end the deals, which have also been in the crosshairs of FTC chairman Jon Leibowitz in recent years. But the agency has only had mixed results in court decisions since the last time this legislation was introduced on Capitol Hill in 2010.
In March, the U.S. Supreme Court will hear arguments in Federal Trade Commission v. Watson Pharmaceuticals Inc., a case involving a pay-for-delay arrangement for the testosterone treatment Androgel.
In that case, the U.S. Court of Appeals for the Eleventh Circuit rejected the FTC’s argument that the arrangement was unfair restraint of trade, writing in April that the FTC’s approach "would require an after-the-fact calculation of how ‘likely’ a patent holder was to succeed in a settled lawsuit if it had not been settled."
Other rulings have gone against the FTC. In March 2011, the U.S. Supreme Court let stand a decision from the U.S. Court of Appeals for the Second Circuit that found a pay-for-delay deal between Bayer AG and Barr Pharmaceuticals (now owned by Teva Pharmaceuticals) to drop a patent lawsuit over the antibiotic Cipro did not violate antitrust laws.
The FTC also lost a case in the Eleventh Circuit challenging a deal between Schering-Plough Corp., Upsher-Smith Laboratories and American Home Products Corp. involving the high blood pressure medication K-Dur 20.