Ending Pay-For-Delay Deals Could Raise over $5 Billion

Merrill Goozner

Posted 11/08/11 on Gooz News

The deficit reduction “super committee” charged with coming up with $1.2 trillion in budget reductions over the next decade shouldn’t let this one pass. The Congressional Budget Office today estimated that ending drug industry “pay for delay” deals with generic manufacturers will save the federal government over $5 billion over the next decade.

The “Preserve Access to Affordable Generics Act,” sponsored Sen. Herb Kohl, D-Wis., with eight co-sponsors, including two Republicans, requires that any deal between two companies that delays production of a generic drug after a patent has expired must show that the deal is “pro competitive,” which would effectively ban the practice. The Federal Trade Commission issued a report a year ago that found 66 of these deals reached over the past half decade were costing consumers about $3.5 billion a year.

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