This vote was on an amendment that would have barred prescription drug companies from paying other companies not to produce competing medications.
Sen. Jeff Bingaman (D-NM) offered the amendment during consideration of a bill that would extend Food and Drug Administration (FDA) programs. Sen. Bingaman’s amendment would have outlawed so-called “pay-for-delay” deals, a growing practice that he argued results in higher prices for medication. When companies develop a new prescription drug, they are generally given a patent that allows them a monopoly on its production. Once the patent wears out, other companies have an opportunity to enter the market, generating competition that lowers the price of the drug. But in the 1990s, drug companies began forging legal settlements among themselves that preserved the drug monopoly and the higher prices that come with it.
Sen. Bingaman argued that the “pay-for-delay” deals were anticompetitive. Putting an end to the practice would put money in American consumers’ pockets and help bring down the cost of health care, he said.
“If my colleagues favor competition, this amendment helps to promote competition,” Sen. Bingaman said. “If we want to see reduced costs to the taxpayer for health care, then this amendment helps to reduce the cost to the taxpayer. If we want to reduce what patients and hospitals and insurance companies have to pay for prescription drugs, this amendment helps to do that as well.”
Opponents of Sen. Bingaman’s amendment argued that it would reduce the financial incentive that entices makers of generic drugs to enter the market. Because generic drug makers are required to prove that they are not violating any patents before selling their products, they rack up hefty legal fees before they sell their first pill. Meanwhile, the patent-holders often game the system to try to keep the generic makers out of the market. The result, Sen. Jon Kyl (R-AZ) said, is that generic drug makers would be unlikely to risk large sums of money seeking approval to sell a drug unless they thought they would earn a big payoff. Taking “pay-for-delay” off the table would eliminate one such prize, he said, making generic makers more reluctant to try and tightening patent-holders’ grip on their monopolies.
“(Sen. Bingaman’s amendment) ignores fundamental economic realities of pharmaceutical patent litigation, and it would ultimately result in fewer generic drugs being brought to market and delays in the launch of many of the generic drugs that do go to market,” Sen. Kyl said.
Sen. Bingaman’s amendment was defeated by a vote of 28-67. Voting “yea” were 25 Democrats, including a majority of progressives, and 3 Republicans. Voting “nay” were 41 Republicans and 26 Democrats. As a result, the Senate defeated the effort to bar prescription drug companies from paying other companies not to produce competing medications.