BILL NUMBER: S4513
SPONSOR: FERNANDEZ
 
TITLE OF BILL:
An act to amend the public health law, in relation to preserving access
to affordable drugs
 
PURPOSE OR GENERAL IDEA OF BILL:
To preserve access to affordable prescription drugs by banning pay-to-
delay agreements.
 
SUMMARY OF PROVISIONS:
Section 1 amends Article 2-a of the public health law by adding a new
title IV to preserve access to prescription drugs by banning pay-to-de-
lay agreements.
Section 2 establishes that if any clause, sentence, paragraph, subdivi-
sion, section or part is found to be invalid or unenforceable, the judg-
ment will not invalidate the remainder of the bill.
Section 3 establishes the effective date.
 
JUSTIFICATION:
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 biosi-
milar drugs, which increase competition and help lower prices, 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. These 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.
Patients in New York -- and around the country - are facing unacceptable
costs and a lack of transparency about how medication is priced. For too
long we have allowed pharmaceutical companies to operate under lax regu-
lations at the expense of patients. This bill makes it the presumption
that an agreement resolving or settling a patent infringement claim in
connection to the sale of a pharmaceutical product has anti-competitive
effects if 1) a non reference drug filer receives anything of value from
another company asserting patent infringement and 2) the non-reference
drug filer agrees to forego research, development, manufacturing,
marketing, or sale of the drug for a period of time. The legislation
sets forth civil penalties for individuals who violate or assist in
violating this section to ensure compliance.
 
PRIOR LEGISLATIVE HISTORY:
2021-2022: S4370 / A7245
 
FISCAL IMPLICATIONS:
TBD
 
EFFECTIVE DATE:
This act shall take effect on the sixtieth day after it shall have
become a law.