Enacts the manufacturer disclosure and transparency act requiring prescription drug manufacturers to notify the attorney general of arrangements between pharmaceutical manufacturers resulting in the delay of the introduction of generic medications.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2289A
SPONSOR: Gallagher TITLE OF BILL:
An act to amend the general business law, in relation to requiring
prescription drug manufacturers to notify the attorney general of
arrangements between pharmaceutical manufacturers resulting in the delay
of the introduction of generic drugs
PURPOSE OR GENERAL IDEA OF BILL:
Enacts the "Manufacturer Disclosure and Transparency Act" to bring
disclosure and transparency to the pay-for-delay deals that harm consum-
ers by delaying generic drug competition with brand-name drugs.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 establishes the title of the bill.
Section 2 relates to the delay of introduction of generic medications.
Section 3 establishes a severance clause. Section 4 sets the effective
date.
JUSTIFICATION:
The Manufacturer Disclosure and Transparency Act would bring transparen-
cy and disclosure to the pay-for-delay deals that harm consumers by
delaying generic drug competition with brand-name drugs. Rising
prescription drug prices have been devastating to New Yorkers who depend
on prescription drugs to keep them healthy. The growing number of brand
name and specialty drugs with prices of $100,000 or more has led many to
question whether the costs associated with these products are defensible
or sustainable. The timely availability of generic and biosimilar drugs,
which will increase competition and help lower prices-will play an
important role in addressing these concerns.
Brand-name drug manufacturers often file patent infringement lawsuits
against the first generic drug manufacturers to seek FDA approval for
competing generic drugs. Rather than face the costs and uncertainty
associated with litigation, some brand-name and generic drug manufactur-
ers choose to enter into what is known as a "pay-for-delay" agreement
where the brand-name drug manufacturers compensate the generic drug
manufacturer for keeping its product off the market for a certain amount
of time. Such agreements can be particularly problematic when they
involve the first-to-file generic manufacturer, because no other generic
manufacturer can enter the market until the first-to-file manufacturer
has marketed its product for 180 days.
These pay-for-delay agreements provide financial benefits to drug
manufacturers at the expense of consumers; the brand-name manufacturer
can continue to charge monopoly prices, and the generic company is
compensated for its inaction. The Federal Trade Commission (FTC) esti-
mates that pay-for delay agreements cost American consumers $3.5 billion
per year.
The FTC has found that pay-for-delay agreements prohibit generic entry
for an average of nearly 17 months longer than patent settlement agree-
ments without such payments. In the meantime, consumers must continue
paying brand-name drug prices, which can be as much as 85 percent higher
than the prices of their generic drug counterparts. Any delay in gener-
ic entry results in a longer period of purchases at the full brand price
and correspondingly fewer purchases at less expensive generic prices.
This negatively impacts both consumers and other payers, including
taxpayer-funded health programs such as Medicaid.
Generic drugs have proven to be one of the safest and most effective
ways for consumers to lower their prescription drug costs, and the use
of generic drugs has been steadily increasing. These drugs should not be
delayed from entering the marketplace.
PRIOR LEGISLATIVE HISTORY:
2023-2024: S03518 / A895
2021-2022: S398 / A8824
2019-2020: S5169 / A7196
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This act shall take effect one the one hundred eightieth day after it
shall have come a law.
