Brand/Generic Settlements Bill Clears Senate Cmte., Awaits Day On The Floor

After relatively smooth sailing through the Senate Judiciary Committee, legislation to prohibit "reverse payments" in brand/generic settlements now faces the challenge of securing floor-time for consideration by the full chamber.

Despite concerns from some Republican Judiciary Committee members, Sen. Herb Kohl's, D-Wisc., "Preserve Access to Affordable Generics Act" (¹ S. 316) was not amended and received unanimous consent from the committee on Feb. 15.

"[Senator Kohl] has made a request that I not offer either a substitute or amendment in order to move the bill to the floor, and I'm willing to accommodate Senator Kohl to do that," ranking member Arlen Specter, R-Penn., said.

Kohl's office says they are doing "all they can" to advance the bill and that it is "moving quickly," noting the swift turnaround from the time the bill was introduced to its Judiciary Committee approval.

Sen. Jon Kyl, R-Ariz., expressed his concern that the legislation may be moving too quickly. "I'm a little concerned that we need to pass it out of committee with the suggestion that time is of the essence."

"If it's the will of the committee to move it forward, I would only ask, and hope you would respond affirmatively, that it is not your intention in so doing to quickly try to get this on the agenda of the full Senate," Kyl added.

Many committee members also expressed concerns with the legislation during a Jan. 17 Judiciary Committee hearing, in which FTC Commissioner Jon Leibowitz supported legislative action that placed a blanket prohibition on reverse payment settlements (² (Also see "Brand/Generic Settlement Reform Will Be Balancing Act For Congress" - Pink Sheet, 22 Jan, 2007.), p. 3).

Echoing their concerns from the hearing, Sens. Specter and Orrin Hatch, R-Utah, opposed the "bright line approach," which would prohibit all reverse payment settlements.

"The court hearing the case ought to make a decision whether there has been an antitrust violation having all of the facts before it," Specter said.

"I don't like the bright line approach. I think it's going to forestall and take away some legitimate rights for consumers," Hatch added, though he agreed to work with Kohl "between now and the floor" to reach an agreement.

Specter seemed more uncertain that the differences in approach could be settled before the bill reaches the floor. "Perhaps Senator Kohl and others and I that have concerns can work it out. I don't know if that's possible, because of the strong differences of per se violation and case-by-case analysis, but I'm willing to try," Specter said.

Kohl's bill is one of three pieces of legislation on generics that he has introduced this year. The Wisconsin senator proposed a bill that would require Medicare to limit Part D coverage to generic drugs when available unless the branded version is designated as "medically necessary." Kohl also reintroduced legislation prohibiting brand name companies from using FDA's citizen petition review process to block generic competitors from reaching the market.

Perhaps another sign of Kohl's eagerness to quickly push his reverse payment bill through Senate, he has no plans to attach either of his additional bills to the legislation. Currently there is not a bill similar to Kohl's in the House, though it is possible that legislation will be introduced in the buildup to S. 316's march to the floor.

Critics of reverse payment settlements say they are anticompetitive because nowhere else in patent litigation would the patent holder pay the alleged infringer.

And while such deals have become relatively common in the Rx industry, the week of the markup presented another unusual deal: A payment from a brand firm to a generic company that was not a "reverse" payment.

In a deal announced Feb. 12, Watson will receive $35 million from GlaxoSmithKline to settle charges that GSK's now-generic Wellbutrin XL (bupropion) infringes a Watson patent for a controlled-release dosage form.

- Daniel Poppy ([email protected])