Preserves access to affordable drugs

• Democratic30
• Republican1

◆ The sponsor's argument

Why Nathalia Fernandez says this is needed

Rising prescription drug prices have been devastating to New Yorkers who depend on prescription drugs to keep them healthy. The growing number of brand-name and specialty drugs with prices of $100,000 or more has led many to question whether the costs associated with these products are defensible or sustainable. The timely availability of generic and biosi- milar drugs, which increase competition and help lower prices, play an important role in addressing these concerns. Brand-name drug manufacturers often file patent infringement lawsuits against the first generic drug manufacturers to seek FDA approval for competing generic drugs. Rather than face the costs and uncertainty associated with litigation, some brand-name and generic drug manufactur- ers choose to enter into what is known as a pay-for-delay agreement, where the brand-name drug manufacturers compensates the generic drug manufacturer for keeping its product off the market for a certain amount of time. These agreements can be particularly problematic when they involve the first-to-file generic manufacturer, because no other generic manufacturer can enter the market until the first-to-file manufacturer has marketed its product for 180 days. These pay-for-delay agreements provide financial benefits to drug manufacturers at the expense of consumers; the brand-name manufacturer can continue to charge monopoly prices, and the generic company is compensated for its inaction. The Federal Trade Commission (FTC) esti- mates that pay-for delay agreements cost American consumers $3.5 billion per year. The FTC has found that pay-for-delay agreements prohibit generic entry for an average of nearly 17 months longer than patent settlement agree- ments without such payments. In the meantime, consumers must continue paying brand-name drug prices, which can be as much as 85 percent higher than the prices of their generic drug counterparts. Any delay in gener- ic entry results in a longer period of purchases at the full brand price and, correspondingly, fewer purchases at less expensive generic prices. This negatively impacts both consumers and other payers, including taxpayer-funded health programs, such as Medicaid. Generic drugs have proven to be one of the safest and most effective ways for consumers to lower their prescription drug costs, and the use of generic drugs has been steadily increasing. These drugs should not be delayed from entering the marketplace. Patients in New York -- and around the country - are facing unacceptable costs and a lack of transparency about how medication is priced. For too long we have allowed pharmaceutical companies to operate under lax regu- lations at the expense of patients. This bill makes it the presumption that an agreement resolving or settling a patent infringement claim in connection to the sale of a pharmaceutical product has anti-competitive effects if 1) a non reference drug filer receives anything of value from another company asserting patent infringement and 2) the non-reference drug filer agrees to forego research, development, manufacturing, marketing, or sale of the drug for a period of time. The legislation sets forth civil penalties for individuals who violate or assist in violating this section to ensure compliance.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.