Antitrust Law Daily Bills introduced to curb abuses in FDA petition process, study PBM mergers
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Tuesday, April 30, 2019

Bills introduced to curb abuses in FDA petition process, study PBM mergers

By Nicole D. Prysby, J.D.

Bipartisan legislation has been introduced in both houses of Congress to modify the FDA petition process to curb incentives for pharmaceutical companies to stall regulatory approval of generics through sham petitioning. Additional proposed legislation would direct the FTC to evaluate the current state of the pharmacy benefit manager industry.

The proposed Stop Significant and Time-wasting Abuse Limiting Legitimate Innovation of New Generics (Stop STALLING) Act" has been introduced in the House of Representatives and the Senate in an effort to reduce the incentives for branded pharmaceutical companies to interfere with the regulatory approval of generics and biosimilars that would compete with their own products. Senator Amy Klobuchar (D., Minn.), Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights and Senator Chuck Grassley (R., Iowa), Chairman of the Senate Finance Committee, are taking the lead on the bipartisan effort in the Senate. Representative Jerrold Nadler (D., N.Y.,), Chairman of the House Judiciary Committee, Representative Doug Collins (R., Ga.), Ranking Member of the House Judiciary Committee, Representative Jim Sensenbrenner (R., Wis.), Ranking Member of the House Judiciary Subcommittee on Antitrust, Commercial and Administrative, Representative Hakeem Jeffries (D., N.Y.), Chairman of the House Democratic Caucus, and Representative Peter Welch (D., Vt.) lead the effort on the House version (H.R. 2374).

Specifically, the Stop STALLING Act would create an FTC cause of action against sham petitions, create a rebuttable legal presumption of illegality for certain petitions referred from the FDA with a finding that they were submitted for the primary purpose of delaying the approval of a drug application, and grant the FTC the authority to seek civil penalties for violations.

"Increased competition in prescription drug markets can only happen if we eliminate incentives for bad behavior, like submitting sham petitions that delay safe and effective generics and biosimilars from reaching the patients who need them," said Klobuchar in an April 29 statement.

FTC study of PBM industry. Also on April 29, Grassley announced the Prescription Pricing for the People Act for 2019, legislation that would require the FTC to study the role and recent merger activity of pharmacy benefit managers (PBMs). The measure is co-sponsored by Grassley and Senator Maria Cantwell (D., Wash.), among others. It directs the FTC to evaluate the current state of the PBM industry, determine whether more information about the roles of intermediaries would benefit consumers, and offer policy recommendations to improve transparency, prevent anticompetitive behavior and promote efficiencies for patients. The legislation commissions the FTC to evaluate whether PBMs: charge certain payers (including Medicare and Medicaid) a higher price than reimbursement rates for competing pharmacies while reimbursing pharmacies in which the PBMs have an ownership interest at the rate charged to payers; steer patients to pharmacies in which the PBM has an ownership stake; and use formulary designs to depress the market share of low-cost, lower-rebate prescription drugs. The legislation will be referred to the Senate Judiciary Committee, which has jurisdiction over antitrust matters.

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