It is a treat to have Ed Silverman, and an independent Pharmalot back. Tonight, Ed details a Senate bill, passed out of the Judiciary Committee mark-up session -- the aim of which is to greatly curtail naked "pay to delay" deals, if not end them, entirely.
For more on how that all works, at present, see my backgrounders -- on the topic generally, the US DoJ's emerging views, and the specific case of Temodar, a Schering-Plough cancer drug, now enjoying its 32nd year of patent exclusivity.
It seems an outright ban might not attract enough votes to pass both chambers, so the current bill requires that all proponents of any "pay to delay" deal affirmatively prove, by clear and convincing evidence, that the deal is actually procompetitive. Per Pharmalot:
. . . .The bill, which reports say passed 12-7 along party lines, would allow drug makers to strike a deal only if they provide ‘clear and convincing evidence’ that an agreement doesn’t stymie competition. How that will be proven is unclear. Herb Kohl, the Wisconsin Democrat who introduced the bill, opposes any attempt to lower the threshold of evidence, although the bill was originally tougher - it would have banned these deals altogether. . . .
To make it all a little clear[er], and in an attempt to answer Ed's question (bolded, above), I did some digging, and found Senator Kohl's full-text PDF amendment (Congressional Record for September 23, 2009). The relevant portion is below, and what it says is that all such deals are unlawful unless the companies show (1) a significant shortening of the patent's life (on the branded drug), and the agreed upon entry date for the generic; (2) a significant positive monetary value to consumers from the (delayed) future generic, under the proposed agreement; (3) only a reasonable figure is being paid to the generic company (under the agreement) to settle the patent infringement claim; (4) proportionality between the the agreement's payments and the amount the generic would have received by winning the patent litigation; (5) a large reduction in the branded drug's revenues if it had lost the patent litigation; (6) a short time period between the agreement and the date of the settlement of the generic's patent infringement claim; and (7) such other factors that a judge or jury might deem relevant to determine the competitive effects of the proposed "pay to delay" agreement.
Shorter version: this effectively ends the Merck/Nexium practice, and likely, the Schering/Temodar one, as well. In fact it ends them all, except in truly extraordinary situations. Here is Senator Kohl's bill amendment text, set as neutral language:. . . .PRESUMPTION. — (A) IN GENERAL. —Subject to subparagraph (B), in such a proceeding, an agreement shall be presumed to have anticompetitive effects and be unlawful if —
(i) an ANDA filer receives anything of value; and
(ii) the ANDA filer agrees to limit or forego research, development, manufacturing, marketing, or sales of the ANDA product for any period of time. . . .
(B) EXCEPTION. — The presumption in subparagraph (A) shall not apply if the parties to such agreement demonstrate by clear and convincing evidence that the pro-competitive benefits of the agreement outweigh the anti-competitive effects of the agreement.
(C) COMPETITIVE FACTORS. In determining whether the settling parties have met their burden under subsection (a)(2)(B), the fact finder shall consider —
(1) the length of time remaining until the end of the life of the relevant patent, compared with the agreed upon entry date for the ANDA product;
(2) the value to consumers of the competition from the ANDA product allowed under the agreement;
(3) the form and amount of consideration received by the ANDA filer in the agreement resolving or settling the patent infringement claim;
(4) the revenue the ANDA filer would have received by winning the patent litigation;
(5) the reduction in the NDA holder’s revenues if it had lost the patent litigation;
(6) the time period between the date of the agreement conveying value to the ANDA filer and the date of the settlement of the patent infringement claim; and(7) any other factor that the fact finder, in its discretion, deems relevant to its determination of competitive effects under this subsection.
(D) LIMITATIONS. In determining whether the settling parties have met their burden under subsection (a)(2)(B), the fact finder shall not presume —
(1) that entry would not have occurred until the expiration of the relevant patent or statutory exclusivity; or
(2) that the agreement’s provision for entry of the ANDA product prior to the expiration of the relevant patent or statutory exclusivity means that the agreement is pro-competitive, although such evidence may be relevant to the fact finder’s determination under this section. . . .
My reaction? Roll Tide, Roll.
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