With U.S. Senator Chuck Grassley
Q: What can Congress do to address the high prices for prescription medicines?
A: There’s no doubt that the price of prescription medicines is a big concern for Iowans. This issue comes up repeatedly at my town meetings. It’s not only a pocketbook issue that squeezes household budgets. It’s a matter of affording life-saving access to medicine to treat cancer, or paying for prescription drugs that help improve the quality of life for family members suffering from chronic diseases, such as arthritis, diabetes and epilepsy, as an example. Thanks to innovation, research and development, modern medicine is performing medical miracles that are keeping patients healthier, stronger and living longer. By most every measure, from research and development to clinical trials and everything else that goes into bringing a drug to market, it requires significant investment and financial capital. Companies that have invested in costly and lengthy research and development to create the next modern miracle drugs should be able to reap the benefits of their investment in innovation. We also want to ensure that consumers have access to more choice and cheaper alternatives as soon as possible. My bipartisan Preserve Access to Affordable Generics Act is a good place to start. It would fix an anti-competitive practice in which a brand name drug company pays a generic competitor to keep its products off the market. It’s a business arrangement often referred to as “pay-for-delay.”
Q: How do pay-for-delay deals work?
A: Consumers are paying artificially higher prices for certain drugs that are on the market. What’s happening is brand name drug companies are paying certain generic drug companies to delay bringing their product to market. They are reaching patent settlement agreements that twist logic on its head. This pay-to-delay practice is anti-competitive and unlawful. A 2014 report from the Federal Trade Commission listed 29 potential pay-for-delay settlements that involved 21 brand name pharmaceutical products. The FTC reported the combined U.S. sales for these brand name drugs reached roughly $4.3 billion. When brand name pharmaceutical giants use anti-competitive “pay-for-delay” agreements to keep less expensive generics off the pharmacy store shelves, it prevents competition from putting downward pressure on retail drug prices. Ultimately, these sweetheart deals are keeping more affordable prescription drugs out of consumers’ medicine cabinets. Pay-for-delay drives up out-of-pocket costs for sick patients. Such anti-competitive pay-offs are rip-offs to consumers and the taxpaying public.
Q: How would your bill fix this problem?
A: My bill would prevent brand name drug companies from subverting a 1984 federal law that was designed to foster market entry of generic drugs and preserve incentives for innovation in the pharmaceuticals industry. Consumers know that generic drugs generally cost less than brand name drugs. In fact, they can cost up to 90 percent less. And federal tax dollars pay an estimated 38.6 percent of prescription medicine in the United States through Medicare and Medicaid. The taxpaying public’s share is expected to rise to 47 percent within the next decade. So when generic makers and brand name drug manufacturers enter financial agreements that provide a benefit to the generic company so long as it agrees to limit, delay or stay out of the market – consumers and taxpayers get the short end of the stick. As chairman of the Senate Judiciary Committee, which has jurisdiction of the nation’s anti-trust and patent laws, I am keenly tuned in to our nation’s historical embrace of patent protections to foster innovation, ownership and prosperity in America, as well as the need to be vigilant about abusive behavior that harms Americans. I am working to uphold and strengthen this legacy to help ensure the marketplace operates fair and square for consumers, innovators, entrepreneurs and taxpayers. Straightening out anti-competitive practices that are turning patent policy on its head is the right thing to do for the public good, from individual patients to the public health and the public purse.
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