Antitrust Provisions Stripped From Health Care Bill
By Aruna Viswanatha | March 18, 2010 4:54 pm

Two proposals for stricter antitrust enforcement in the health care industry did not make the cut for the final heath care overhaul package unveiled Thursday. Both proposals faced procedural hurdles.

One proposal would have banned brand-name drug manufacturers from making payments to keep competing drugs off the market; the other would have repealed a 1940s law that exempts health insurers from some federal antitrust scrutiny. Both proposals have been offered as stand-alone bills, and have made it part-way through the legislative process.

Both chambers of Congress plan to bring up the final health care measure using reconciliation, a complex and relatively obscure legislative process, but one that shields the legislation from a time-consuming and possibly fatal filibuster in the Senate.  Under reconciliation rules, a member can object to any provision that does not have direct budgetary consequences. According to aides, both provisions might have been vulnerable to such objections during floor debate on the measure.

President Obama had previously expressed support for both provisions, and the House passed the antitrust repeal in a separate bill last month.

The drug deals, sometimes called pay-for-delay settlements, are often used to resolve patent litigation. Under the settlement, one pharmaceutical company will pay a rival who makes a generic version of the drug. In exchange, the rival will keep the cheaper version off the market for months or even years longer than it would otherwise.

The Federal Trade Commission has long argued that such payments violate antitrust laws. The agency has waged a war on such payments both in court, with limited success, and on Capitol Hill. Bills in both the House and Senate have advanced through preliminary committee stages. A recent FTC study said that the deals protect $20 billion in sales and will cost Americans around $35 billion over the next 10 years.

Last July, the Justice Department’s Antitrust Division reversed the previous administration’s stance and sided with the FTC on the issue.

Sen. Herb Kohl (D-Wis.), who chairs the Senate Judiciary antitrust subcommittee, has championed the ban in the Senate. The ban on pay-for-delay settlements was included in the House health bill, but not in the Senate version.

In a statement released Thursday, FTC Chairman Jon Leibowitz said the agency would “continue working on behalf of Americans who are struggling to pay for their health care.”

“It’s not a question of whether this should happen, but when,” he said.

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One Comment

  1. [...] Main Justice: Two antitrust proposals are not in the latest version of the bill. “One proposal would have banned brand-name drug manufacturers from making payments to keep competing drugs off the market; the other would have repealed a 1940s law that exempts health insurers from some federal antitrust scrutiny. Both proposals have been offered as stand-alone bills, and have made it part-way through the legislative process” (Viswanatha, 3/18). [...]