Text size:

Schumer joins fight for low-cost generic drugs

BY GLENN THRUSH | Newsday Washington Bureau

June 28, 2006

WASHINGTON - Sen. Charles Schumer and the Republican chairman of the Senate finance committee are proposing a ban on pacts between drug makers that block production of low-cost generic medicines.

The Supreme Court declined Monday to rule on such settlements between generic and major drug makers. Such deals result in consumers paying billions more for lifesaving medications like Plavix, a stroke-fighting medication, according to Schumer.

Schumer and Sen. Charles Grassley (R-Iowa) are introducing legislation to outlaw the settlements, which have become increasingly popular in the last year. House Democrats, who have been hammering the Bush administration's glitch-plagued Medicare Part D drug plan, are likely to introduce their own version soon, according to staffers.

"These deals between big drug companies and small generic competitors are a financial boon for everyone but the consumer," Schumer said in statement Monday.

"Sweetheart deals that delay the entry of low-cost drugs in the marketplace not only hurt consumers, they also threaten the sustainability of federal health care programs, such as Medicare and Medicaid," Grassley said.

Makers of generics often sue major drug companies for the right to produce identical versions of lucrative, patented drugs. If a generic producer has a strong case, a major drug maker will frequently offer a payment in exchange for keeping the generic off the market.

In 1999, the Federal Trade Commission cracked down on such agreements, but a Georgia court case last year cleared the way for new settlements.

Both generic and name-brand drug makers have opposed attempts to regulate their agreements.