Another Capitol Hill Missive Objects to the Inclusion of Patent Settlement Provisions in FY 2011 Appropriations Bill

By Kurt R. Karst –      

Some Senate Democrats have joined their Republican colleagues in voicing opposition to the inclusion of the “Preserve Access to Affordable Generics Act” (S. 369) in the Fiscal Year 2011 Financial Services and General Government Appropriations Bill (S. 3677).  As we previously reported, in late July, the U.S. Senate Committee on Appropriations approved the inclusion of the “Preserve Access to Affordable Generics Act” in the report (Senate Report No. 111-238; pages 144-148 & 150-151) accompanying S. 3677.  The legislation would make patent settlements (or what opponents call “pay-for-delay” or “reverse payment” agreements) presumptively anticompetitive and unlawful if challenged by the Federal Trade Commission (“FTC”), unless it can be demonstrated “by clear and convincing evidence that the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement.” 

The brief October 21, 2010 letter to Senate Majority Leader Harry Reid (D-NV) and Appropriations Committee Chairman Daniel Inouye (D-HI) is signed by Sens. Arlen Specter (D-PA), Robert Casey (D-PA), Frank Lautenberg (D-NJ), Tom Carper (D-DE), and Kay Hagan (D-NC) and states:

We write to request that the provisions of S. 369 not be included in any appropriations bill this Congress.  S. 369 is an anti-trust bill and outside the purview of the Appropriations Committee.  Furthermore, we have substantive concerns with the content of these provisions, and feel that they can only be properly resolved though the regular order in the Senate.  S. 369 was favorably reported by the Judiciary Committee on October 15,2009, and is awaiting time on the Senate floor, where its provisions can be fully and fairly debated. 

The inclusion of S. 369 in an appropriations bill contradicts both the spirit and the letter of the Senate rules.  Therefore, we ask you to ensure that appropriations bills in the 111th Congress not include S. 369.

The letter follows a September 17, 2010 letter from Sens. Jeff Sessions (R-AL), Tom Coburn, (R-OK), John Cornyn (R-TX), and John Thune (R-SD)) to Senate Republican leaders.  As we previously reported, that letter expressed “vigorous objection” to the inclusion of the “Preserve Access to Affordable Generics Act” in S. 3677 and states that “the reported bill gives excessive power over such settlements to the FTC – a power that the FTC has shown itself in the past to be unable to exercise in a responsible or economically rational manner – and that the bill would do serious violence to the Hatch-Waxman process for the market entry of generic drugs.”

The Senate will presumably take up S. 3677 when it returns from recess after the November 2nd mid-term elections.