FTC Commissioner Objects to Certain Provisions in Senate FDA User Fee Reauthorization Legislation

June 5, 2012

By Kurt R. Karst –      

As the U.S. Senate and U.S. House of Representatives geared up last month to consider bills in their respective chambers to, among other things, reauthorize and amend old and establish new user fee statutes, one FTC Commissioner – Commissioner J. Thomas Rosch – penned a letter to Senate Majority Leader Harry Reid (D-NV) and Senate Republican Leader Mitch McConnell (R-KY) expressing opposition to the inclusion of two provisions in S. 3187, the FDA Safety and Innovation Act, concerning patent settlement agreements (referred to in the letter as Pay-For-Delay (“PFD”) agreements) and Risk Evaluation Mitigation Strategies (“REMS”).

“[T]he effort to tack PFD legislation onto ‘Must Have’ legislation may not be in the public interest,” said Commissioner Rosch referring to the Fair and Immediate Release of Generic Drugs Act.  That bill was introduced as an amendment to S. 3187 by Sen. Jeff Bingaman (D-NM) during Senate Floor debate on the FDA bill and proposed to amend the FDC Act’s provisions with respect to “first applicant” status and 180-day marketing exclusivity for certain ANDA sponsors to address patent settlement agreements.  As we previously reported, the amendment failed by a 28-67 vote.  (The House version of the FDA bill, H.R. 5651, the FDA Reform Act of 2012, was passed last week – see our previous post here – and does not include a provision conerning such agreements.) 

“My primary concern is that the bill would impede pioneer and generic pharmaceutical firms from settling patent disputes to a greater extent than the burden shifting approach would do so.  There is not a consensus among antitrust scholars or economists that impeding such settlements would be in the public interest. . . .  Before any legislation on this subject is adopted, legislators should carefully consider the viewpoints of all stakeholders.  It should not simply be tacked onto ‘Must Have’ legislation on the Senate floor,” said Commissioner Rosch.  Commissioner Rosch has previously expressed a similar view.  For example, during a November 2010 speech, he commented that patent settlement legislation “should rise or fall on its own merit” and should not be tacked on to other legislation (at that time, a war funding bill). 

Commissioner Rosch also objects to the inclusion of provisions in S. 3187 concerning REMS and generic competition.  Those provisions, which are included in Section 1131 of the bill as passed by the Senate, would amend FDC Act § 505-1 and state, among other things, that:

Notwithstanding any other provision of law, if a drug is a covered drug, no elements to ensure safe use shall prohibit, or be construed or applied to prohibit, supply of such drug to any eligible drug developer for the purpose of conducting testing necessary to support an application under [FDC Act § (b)(2) or § 505(j) or PHS Act § 351(k)] if the Secretary has issued a written notice described in paragraph (2), and the eligible drug developer has agreed to comply with the terms of the notice.

“[T]he effort to tack substantive REMS legislation onto ‘Must Have’ legislation will not do consumers any favors,” wrote Commissioner Rosch.  Referring to both REMS legislation advocated by FTC staff that would “give the FTC jurisdiction to challenge the refusal of a pioneer drug company to provide product samples to generic manufacturers if the FDA determined that the generic company’s protocols were safe,” and the REMS provisions in the then-Health Education Labor & Pensions Committee-passed version of S. 3187, Commissioner Rosch commented that “[n]either proposal should be tacked on to other legislation on the Senate floor and should instead be considered by the Help Committee on their own merits.”

Although the Senate voted against Sen. Bingaman’s patent settlement amendment, it is possible that the issue will be raised again as the Senate and House hash out differences and work to produce a conference version of the FDA bill.  Folks will also be closely watching how Section 1131 of the Senate bill is handled, as the House version does not contain a similar provision.