House, Senate debate generic drugs

Nancy Marshall-Genzer Jan 13, 2010

House, Senate debate generic drugs

Nancy Marshall-Genzer Jan 13, 2010


Kai Ryssdal: House and Senate leaders trooped down Pennsylvania Avenue to the White House again today. There was yet another epic meeting on the health care overhaul. To work out yet another difference between the House and Senate bills.

Today’s wrinkle was generic drugs. Getting ’em to the market sooner and saving billions. Marketplace’s Nancy Marshall Genzer reports.

NANCY MARSHALL GENZER: When the patent on a brand-name drug like Lipitor expires, competitors can start producing generic versions that are a lot cheaper. But there are often disagreements over when generics can be introduced. Rather than go to court, the branded drug makers pay the generic folks to delay their drugs. The Federal Trade Commission reported today that these so-called pay-for-delay settlements cost consumers $3.5 billion a year.

Jon Leibowitz is the chair of the FTC.

JON LEIBOWITZ: When companies makes these payoffs, they get a longer period of exclusivity. When companies receive these payoffs, they sit it out. And that’s not good for consumers.

The House health care bill would outlaw pay-for-delay deals.

Congresswoman Mary Jo Kilroy, an Ohio Democrat, says the lack of generics hurts her constituents.

MARY JO KILROY: I’ve heard from people who have heart medications that have had an impossible time paying for their drugs, get half of their prescriptions.

But the pay-for-delay deals do have their defenders.

ERIK GORDON: I’m not sure it’s an entirely good idea to outlaw them.

Erik Gordon is an economist at the University of Michigan. He says some pay-for-delay deals get generics out sooner because they avert lengthy court battles.

GORDON: So rather than a blanket ban, the test ought to be whether or not it’s a legitimate settlement or an abuse.

An army of drug industry lobbyists is making the drugmakers’ case on Capitol Hill. Leibowitz says there are more than 1,300 registered lobbyists for drug companies.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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