American consumers face skyrocketing out-of-pocket costs for their prescription medications. Senate Bill 2019 - The Preserve Access to Affordable Generics Act (S. 2019) would lower these costs by stopping the anticompetitive practice of “pay-for-delay” deals, also known as “reverse payment agreements.” These schemes enable brand-name pharmaceutical companies to pay-off potential generic competitors to postpone launching lower cost generic medications. The Federal Trade Commission has estimated that eliminating these agreements would save consumers about $3.5 billion a year.
Pay-for-delay deals undermine the intent of the Hatch-Waxman Act, which was passed in 1984 to encourage generic drug companies to bring lower cost medications to market at the earliest – not the latest – point possible. A 2010 FTC report recommended that Congress pass legislation to protect consumers from such anticompetitive agreements. The FTC wrote: “a legislative solution offers the quickest and clearest way to deter these agreements and obtain the benefits of generic competitions form consumers. (more…)