Senator Amy Klobuchar Wants To Stop ‘Pay-For-Delay’ Deals That Keep Drug Prices High
By Emmarie Huetteman, KHN & POLITIFACT HEALTHCHECK
April 26, 2019
Sen. Amy Klobuchar on April 22, 2019 during a CNN town hall for presidential candidates
Washington’s recent fixation with lowering drug costs has introduced Americans to once-insider terms like “pharmacy benefit managers” and “list prices.”
During an April 22 CNN town hall event for Democratic candidates, Sen. Amy Klobuchar (D-Minn.) described a drugmaker practice that sounds a lot like bribery — drawing attention to yet another secretive process that lawmakers and experts say prevents patients from obtaining affordable prescription drugs.
America, meet “pay-for-delay.”
“We can stop this horrible practice where big pharmaceuticals pay off, they literally pay off generics to keep the prices and the competition off the market,” Klobuchar said. “That’s bad, and we can fix it.”
Klobuchar’s comment was one of the fundamental changes she said she would make to the health care system if elected president.
She said ending the practice of pay-for-delay, as well as allowing Medicare to negotiate drug prices and importing less expensive drugs from countries like Canada, could help bring down pharmaceutical costs.
Nearly 8 in 10 Americans believe drug prices are unreasonable, according to a recent poll from the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.) So it is little surprise that not only Klobuchar but also many presidential candidates are talking about drug costs.
This practice of pay-for-delay sounds almost too shady to be real, so we decided to see if her claim checks out: Are pharmaceutical companies paying generic drugmakers to delay marketing their drugs, keeping prices high? Is that legal? And can it be stopped?
The Back Story On ‘Pay-For-Delay’ Deals
Yes, it is true that pharmaceutical companies compensate generic competitors to hold off on marketing their versions of brand-name drugs. It is also true that this practice results in delays before cheaper, generic drugs become available, leaving patients no choice but to pay for the pricier, brand-name drugs they have been prescribed.
Take Humira, a blockbuster anti-inflammatory medication that treats diseases such as rheumatoid arthritis and Crohn’s disease. AbbVie, the maker of Humira, has aggressively defended its claim on the top-selling drug, filing many patents and striking deals with would-be competitors to retain its exclusivity.
To be sure, the competitors’ versions of Humira are technically “biosimilars,” not generics. But as far as pay-for-delay deals go, they play the same role in this system.
As a result, cheaper versions of Humira will not be available in the United States until 2023 — despite already being on the market in Europe.
Amy Klobuchar, comments during a CNN town hall, April 22, 2019.
Kaiser Family Foundation, “Public Opinion on Prescription Drugs and Their Prices”, March 1, 2019.
Sarah Jane Tribble, Kaiser Health News, “Why The U.S. Remains The World’s Most Expensive Market For ‘Biologic’ Drugs”, Dec. 20, 2018.
The Pew Charitable Trusts, “Policy Proposal: Banning or Limiting Reverse Payment Agreements”, June 19, 2017.
The Food and Drug Administration, “Paragraph IV Drug Product Applications: Generic Drug Patent Challenge Notifications”, accessed April 24, 2019.
The Supreme Court, “Federal Trade Commission v. Actavis, Inc. et al.”, June 17, 2013.
The Federal Trade Commission, “Pay-for-Delay: When Drug Companies Agree Not to Compete”, accessed April 23, 2019.
Telephone interview with Dr. Aaron Kesselheim, a Harvard Medical School associate professor, April 23, 2019.
Telephone interview with Rodney Whitlock, a health policy consultant and former Republican congressional staffer, April 23, 2019.
Congress.gov, “S.64 – Preserve Access to Affordable Generics and Biosimilars Act”, accessed April 24, 2019.
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