Some lawmakers balk at bill on patent drugs

WASHINGTON (Reuters) - Some U.S. Senate Republicans voiced reservations on Thursday about a bill designed to stop drug makers from striking deals to restrict the introduction of cheaper generic drugs.

Republicans joined Democrats on the Senate Judiciary Committee in endorsing a bill that would crack down on drug patent settlements, but some Republican senators said they would not back final passage without substantial changes.

"In its current form, I can't support it," Republican Sen. Orrin Hatch of Utah said at a committee meeting.

The generic drug bill proposed by Democrats Patrick Leahy of Vermont, Herb Kohl of Wisconsin and other committee members, targets an increasingly common tactic used by brand-name drug makers -- legal settlements that involve payments to generic rivals to delay the introduction of cheaper alternatives.

The bill would ban any settlement that included both a payment to the generic drug maker and a delay in the introduction of its generic drug.

"I believe today's vote shows that many of my colleagues agree that these settlements are anti-competitive and that brand and generic drug companies are abusing this practice," Kohl said of the committee vote.

Generic drugs typically cost less than brand-name drugs. A generic competitor can enter the market before a brand-name drug patent expires if it can show the patent to be invalid or not infringed on by the copycat version.

Legislation to ban the patent settlements was backed by Federal Trade Commission member Jon Leibowitz at a committee hearing last month.

"The remarkable thing is that notwithstanding the full-court press put on by the pharmaceutical industry and some legislative disagreements by members of the committee ... a very strong bill is now awaiting action on the floor," Leibowitz said after Thursday's meeting.

OPPOSED BY DRUG MAKERS

The agency has challenged several patent settlement deals, but has lost key cases in court. Those court decisions have emboldened the industry and led to an increasing number of deals in the past two years. Both brand-name and generic drug makers oppose the bill pushed by Kohl and Leahy.

At a committee hearing last month, industry officials argued that many patent settlements allowed generic versions to be sold before the expiration of the brand-name patents. They said an outright ban could hurt innovation and cut the incentive of generic companies to enter the market.

At Thursday's meeting, Republicans said they backed efforts to stop anti-competitive drug patent settlements. But they said a ban on all settlements proposed by Kohl and Leahy was too broad and could thwart some pro-competitive deals.

Democrats control the Senate with 51 of 100 seats. But 60 votes would be needed to end a possible Republican procedural roadblock.

Republicans agreed to help advance the bill out of committee, as Democrats said they would seek a compromise to address their concerns before bringing it to the floor for a full Senate vote.

Pennsylvania Republican Sen. Arlen Specter said he had drafted a modified version of the bill and favored letting federal courts decide which patent settlements were anti-competitive and which were pro-competitive.

Some backers of Kohl's bill said that would do little to stem the tide of anti-competitive patent deals since the courts had already been treating the deals favorably.