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Congress·Reported·11 months ago

Senate Committee Advances Bill to Ban "Pay-for-Delay" Drug Deals That Keep Generics Off Market

Also known as: Preserve Access to Affordable Generics and Biosimilars Act

Legislative Progress

✓ Filed
Review
Senate
House
President

Impacts

Positive Impacts(4)
Chronic Illness
Helps
Medicare
Helps
Medicaid
Helps
Disability Benefits
Helps

Key Points

  • Congress would crack down on deals where a brand-name drug company gives something of value to a generic or biosimilar maker to wait longer before selling a cheaper alternative.
  • These “pay-for-delay” settlements would be presumed illegal when the generic or biosimilar company gets value and agrees to pause or limit making, marketing, or selling the lower-cost drug.
  • The Federal Trade Commission could take companies to court and seek penalties of up to 3 times the value tied to the illegal deal, plus court orders to stop the behavior.
  • The bill allows some settlement terms, like letting a generic launch before a patent ends, paying reasonable legal costs (up to $7.5 million in 2025, adjusted after), or agreeing not to sue.
  • Drug companies would also have to certify that they turned over the full, complete agreement and any side deals to federal enforcers, making it harder to hide delay agreements.
Prescription DrugsConsumer ProtectionHealthcare

Milestones

4 milestones5 actions
Apr 10, 2025Senate

Placed on Senate Legislative Calendar under General Orders. Calendar No. 46.

Apr 10, 2025Senate

Committee on the Judiciary. Reported by Senator Grassley with an amendment in the nature of a substitute. Without written report.

Apr 3, 2025Senate

Committee on the Judiciary. Ordered to be reported with an amendment in the nature of a substitute favorably.

Mar 24, 2025Senate

Read twice and referred to the Committee on the Judiciary.

Mar 24, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

As soon as the bill becomes law

FTC can challenge certain “pay-for-delay” settlement deals made after the law is enacted

Drug companies would need to be more careful about settlements tied to delaying generics/biosimilars, which could speed up competition for some medicines over time

Within 30 days after a covered agreement is filed with the FTC and Justice Department

Companies filing covered drug patent settlement agreements must certify they provided the full deal (including side agreements)

Makes it harder to hide a “delay” deal in separate paperwork or verbal promises, increasing the chance regulators can spot and challenge it

Starting in calendar year 2026 and each year after

Annual cap for “reasonable litigation expenses” exception updates for inflation after 2025

The allowed settlement payment for legal expenses can rise over time, but very large payments would still be more likely to be treated as suspicious

No later than 1 year after the bill becomes law

FTC submits a report to Congress about whether to add another allowed exception (for giving up damages claims)

Congress could later change what kinds of settlement terms are allowed, which affects how drug patent cases end

After investigations and a court case if the FTC proves a violation

Courts can order civil penalties for illegal delay deals (up to 3 times the value tied to the violation)

Creates a strong financial risk for companies considering a delay deal, which is meant to discourage the practice

Related News

4 articles
Fierce Pharma·over 4 years ago

Senate takes aim at pharma's patent schemes, pay-for-delay deals in renewed drug pricing crackdown

The Preserve Access to Affordable Generics and Biosimilars Act would limit “pay-for-delay” deals in which companies compensate generic manufacturers to delay the entrance of their products into the market. Sen. Amy Klobuchar explained the bill targets agreements raising serious competitive concerns.

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KFF Health News·almost 7 years ago

Drug Industry Patents Go Under Senate Judiciary Committee’s Microscope

Klobuchar and Grassley teamed up on the Preserve Access to Affordable Generics and Biosimilars Act, which they say would end “anti-competitive behavior” — specifically, deals struck between branded companies and generic companies to keep a generic, or a biosimilar, off the market.

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Drug Topics·over 5 years ago

Senators target pay-for-delay pharma deals

U.S. Senators Amy Klobuchar and Chuck Grassley reintroduced legislation that would make it illegal for brand-name drug manufacturers to pay-off other drug manufacturers to keep generic versions of brand-name drugs off the market, citing FTC reports on the high cost of these settlements.

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Source Information

Document Type

Congressional Bill

Official Title

Preserve Access to Affordable Generics and Biosimilars Act

Bill NumberS 1096
Congress119th Congress
ChamberSenate
Latest ActionPlaced on Senate Legislative Calendar under General Orders. Calendar No. 46.

Sponsor

Cosponsors

(8)
D: 5R: 3

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.