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: A7196A
SPONSOR: DenDekker 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 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 requires each pharmaceutical manufacturer doing business in
this state that manufactures a brand-name prescription drug and enters
into an agreement with another pharmaceutical manufacturer for the
purpose of delaying or preventing another manufacturer from introducing
a generic substitute for a brand-name drug to, no later than thirty days
after entering into such agreement, send notice to the Attorney General
with the name of the drug, the wholesale price, the disease it is
commonly prescribed to treat, the manufacturer of such drug, the name of
the generic manufacturer and the length of the delay.
The Attorney General is then required to share that information with the
New York State Drug Utilization Review Board, all Medicaid managed care
plans, health carriers and pharmacy benefit managers doing business in
the state.
The Attorney General's office shall also post on its website all the
notices required in section 2 searchable by drug, cost, disease and
manufacturer both for the brand-name and generic drug for public review.
A manufacturer of a brand-name drug who fails to notify the Attorney
General of any agreement specified in the act shall be fined by the
Attorney General no less than five-thousand dollars for a first
violation and no less than ten-thousand dollars for each violation ther-
eafter for each day such manufacturer fails to properly notify the
attorney general pursuant to the requirements of the section.
Additionally, the Attorney General is authorized to promulgate rules and
regulations necessary for the implementation of this section.
Section 3 establishes 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 compensates 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:
New bill.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law.
