Supreme Court Decision on Pay-For-Delay Not Strong Enough

August 13, 2017


Sterling, VA—The American Medical Student Association (AMSA), the nation’s largest independent medical student organization congratulates the Supreme Court of the United States for its decision in FTC v Actavis, that pay-for-delay agreements are subject to antitrust scrutiny. AMSA had wanted a stronger ruling and is disappointed that the Supreme Court declined to call these deals “anticompetitive”, making them unlawful. The 5-3 decision however will likely discourage pay-for-delay deals.

Pay-for-delay agreements occur between brand-name companies and generic-drug manufacturers. Cash payments or some other compensation are given in exchange for a period of delay in the marketing of cheaper drugs.

“Consumers ultimately lose out, paying 60-99 percent more for their brand-name medications,” says Dr. Nida Degesys, AMSA national president. “AMSA strongly opposes pay-for-delay agreements. We had hoped for a stronger decision today but we are confident that this is a stride forward toward eliminating these deals.”

Protecting brand name drugs that are cost-prohibitive delays access to more affordable treatments for vulnerable populations with limited income in the U.S. and abroad. Domestically, these settlements limit the prescribing choices of physicians and hurt quality of care. Internationally, delayed access to generic drugs can cost thousands of lives. Furthermore, these settlements hurt innovation by allowing brand-name companies to continue charging high prices for drugs that are protected by weak patents. Economists at the Federal Trade Commission conservatively estimate that these agreements will cost U.S. consumers $35 billion over the next 10 years.

“Competition, not collusion, is essential in driving scientific discovery. The healthcare system should provide benefits to patients in need, not only those who can afford it,” continues Degesys.

AMSA, along with other consumer advocacy groups, calls upon Congress to strengthen this ruling by passing legislation that would declare these deals to be anticompetitive and unlawful. Two bills have already been introduced into the Senate, the Fair and Immediate Release of Generic Drugs Act, a.k.a. the FAIR Generics Act (S.504) and the Preserve Access to Affordable Generics Act (S. 214). With the latter bill, the Congressional Budget Office estimates savings of $11 billion in federal spending over a decade with additional savings to patients for out-of- pocket expenses.

About the American Medical Student Association

AMSA is the oldest and largest independent association of physicians-in-training in the United States. Founded in 1950, AMSA is a student-governed, non-profit organization committed to representing the concerns of physicians-in-training. To learn more about AMSA, our strategic priorities, or joining the organization, please visit us online at www.amsa.org.