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GPhA: Ban on Patent Settlements is One Prescription Super Commitee Should Ignore

WASHINGTON, D.C. (NOV. 15, 2011) - The Generic Pharmaceutical Association (GPhA) today reasserted its opposition to a legislative ban on pro-consumer patent settlements and praised the growing chorus of policymakers urging the Congressional Super Committee to avoid adopting such a policy, which would serve only to erode access to safe, effective and affordable generic drugs.

"The facts are crystal clear - patent settlements save consumers and taxpayers billions of dollars," said Ralph G. Neas, President and CEO of GPhA. "The growing chorus of lawmakers urging the Super Committee to resist efforts to put a patent settlement ban into their recommendations offers further proof - such a ban is bad public policy that would have a detrimental impact on the American public and eliminate billions of dollars in health care savings from our country."

This month alone, members of the House, Senate and even the Federal Trade Commission (FTC) have spoken out against this legislative ban on patent settlements.

In a letter to the editor published last week, FTC Commissioner J. Thomas Rosch labeled any projected savings from a ban on settlements as "inherently speculative" and asserted that such a policy "should not be tacked onto any other piece of legislation."

Further, nine U.S. Senators called on the Super Committee to avoid this "controversial" legislation, acknowledging that the bill "disregards the fact that patent settlements in practice end expensive and protracted legislation, therefore allowing generic drugs to come to the market faster."

Finally, a letter from Reps. Lamar Smith (R-Texas) and Bob Goodlatte (R-Va.) - chairs of the House Judiciary Committee and Subcommittee on Intellectual Property respectively - laid bare the supposed savings a ban on settlements would bring to consumers and the U.S. health care system.

"Not only does the bill make bad policy… but claims that it might modestly reduce the deficit are highly doubtful," Reps. Smith and Goodlatte said. "Indeed, we believe the bill is as likely to increase the deficit as decrease it."

GPhA urges policymakers to avoid this misguided legislation. Instead of concentrating their efforts on banning pro-consumer and pro-competitive settlements, GPhA urges lawmakers to focus on initiatives that promote, not hamper, consumer access to safe and effective generic drugs.

Further information on the FTC's existing authority to regulate patent settlements, as well as studies from leading economists Jonathan Orszag and Laura Tyson outlining the faulty assumptions on which the legislation's cost savings estimates are based, are included below.

http://www.ftc.gov/os/2004/01/040106pharmrules.pdf
http://www.compasslexecon.com/highlights/Documents/Dickey%20Orszag%20Wil...
http://www.compasslexecon.com/highlights/Documents/Economic_Assessment_o...

GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals fill 78 percent of the prescriptions dispensed in the U.S. but consume just 25 percent of the total drug spending. Additional information is available at gphaonline.org.

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