Pay-For-Delay

Reid's Latest Thorny Issue On Health-Care Bill: Pay-For-Delay

Zachary Roth | December 8, 2009, 1:58PM

Sen. Harry Reid (D-NV) and Sen. Herb Kohl (D-WI)

Here's an interesting window into the legislative sausage-making process - and a classic example, among countless others, of the way in which Senate leaders working on health-care reform are having to walk a tightrope between well-meaning policy goals and crude political imperatives.

As we reported last week, Senator Herb Kohl (D-WI) has sponsored a measure designed to crack down on "pay-for-delay" deals by pharmaceutical companies, in which the maker of a brand-name drug pays a generic to hold off on marketing its cheaper drug, thereby preserving the brand-name's monopoly. This textbook anti-competitive tactic is hugely valuable to drug-makers, because it essentially allows them to buy more protection than their patent confers. But by keeping cheaper generic drugs off the market, it costs consumers billions -- and those costs fall disproportionately on the uninsured.

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