CA Groups Push Bill to Curb “Pay-for-Delay” Prescription Deals

Suzanne Potter | California News Service
A decade ago, the Federal Trade Commission asked Congress to limit pay-for-delay deals among drug companies, but lawmakers have not done so. Photo Credit: Unsplash

SACRAMENTO, Calif. – Patients and health care advocates rallied on the State Capitol steps Thursday August 29 in favor of Assembly Bill 824, which combats so-called pay-for-delay deals, in which pharmaceutical companies pay generic drug makers to keep their products off the market. 

The first-in-the nation bill has to pass the state Senate Appropriations Committee by Friday in order to get a full vote this session.

Assemblymember Jim Wood of Santa Rosa, who authored the bill, says generics introduce competition and help drive prices down for consumers.

“If you can keep people on the brand name drug for longer, it costs your insurance company more money, your premiums are higher,” he points out. “It costs all of us more money, and that needs to change.”

The bill would step up enforcement of laws against these types of deals, and place the burden of proof on the drug companies to prove they aren’t making payments for anti-competitive purposes.

Pharmaceutical companies argue this law would open up the floodgates for expensive consumer lawsuits, which could drive prices up.

The Federal Trade Commission says Americans pay at least $3.5 billion more a year for brand name drugs because generic companies take money to sit on their new products rather than release them.

Wood says the drug companies’ claim that this bill would actually slow the arrival of generic drugs doesn’t hold water.

“We hear from the drug companies that many of these agreements get the drugs to market sooner and they are not anti-competitive,” he states. “And so I’ve asked, you know, ‘Show me.’ And no one’s been able to do that.”

California Attorney General Xavier Becerra recently settled four lawsuits amounting to $70 million against drug companies over pay-for-delay practices.