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Senator Grassley proposes bill to block “Pay for Delay” by drug companies

(Radio Iowa) – Iowa Senator Chuck Grassley is introducing legislation designed to stop pharmaceutical companies from blocking cheaper, generic forms of popular prescription drugs from reaching the market. Grassley says drug makers are paying rivals not to release generic versions of medicines in a process known as “Pay For Delay.”

“It’s a bill that I’ve pushed for many years on behalf of consumers,” Grassley says. “According to the Congressional Budget Office, the legislation would accelerate the availability of lower-priced generic drugs, generating more than $4.7-billion of taxpayer savings.”

A report from the Federal Trade Commission finds generic drugs sell for an average of 15-percent of the original price, while the sale of generic drugs has saved consumers more than one-trillion dollars in the past decade. They’d save even more, Grassley says, if the generic versions were allowed to come out sooner.

Grassley says, “If the average delay is 17 months and the consumer is paying an extra 85% mark-up on a monthly $250 prescription, that, of course, adds up big time.” A recent ruling from the U.S. Supreme Court declared pharmaceutical companies could be sued if they paid rivals to delay the generic versions. That ruling overturned a lower court’s finding which insulated drug companies from such suits.

“The settlement turns the free enterprise system on its head and does not square with the American anti-trust laws,” Grassley says. “Last month, the Supreme Court took a step towards ending this anti-competitive behavior.” The FTC report says the so-called “Pay For Delay” tactics used by drug-makers cost consumers $3.5-billion every year.

Drug companies say the deals made to bring about delays of generic drugs are legitimate patent settlements.