Senators say some patent deals should be banned

WASHINGTON Wed Dec 30, 2009 5:18pm EST

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WASHINGTON (Reuters) - Nine senators have written to Senate leaders asking for the final health care bill to include a provision that makes drug patent settlements illegal if the agreement includes a payment to keep the cheaper generics off the market.

The massive U.S. Senate healthcare reform measure passed last week without a measure to ban the complicated deals. The House of Representative version of the bill does ban the practice and the nine signatories of the letter to Sen. Harry Reid say they want it added to the final version of the health care bill.

"By adopting this provision, conferees can significantly address the rising costs of prescription drugs. These 'pay for delay' agreements between brand name and generic drug companies deny consumers the benefits of generic drug competition," the senators wrote in the December 24 letter.

The nine signatories included Herb Kohl, chair of the Senate antitrust subcommittee, Amy Klobuchar, Jeanne Shaheen, Al Franken and Byron Dorgan.

Critics charge the pacts delay more affordable generics from reaching the market, while drugmakers say the settlements still put generics on pharmacists' shelves before patents expire, but eliminate the uncertainty of court trials.

Kohl told Reuters in an interview in early December he was determined to see the "pay for delay" deals banned.

"I think we're going to win on it. (But) it would be hard to say when," he said in early December. "In any event, it's going to be on the table at the conference committee."

The U.S. Federal Trade Commission, which says the deals cost Americans $3.5 billion per year, has challenged them in court, but with mixed success.

While a member of the U.S. Senate, President Barack Obama co-sponsored an earlier version of the legislation.

A branded medicine loses upward of 80 percent of its revenue once cheaper generic versions start flooding the market.

(Reporting by Diane Bartz; editing by Andre Grenon)

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