The US Senate has thrown out a legislative proposal to ban the “pay-for-delay” agreements between brand-name and generic drugmakers which was recently approved by the House of Representatives.

The measure was included, somewhat incongruously, in the War Funding Bill, which is seeking $60 billion to pay for the war in Afghanistan, plus billions of dollars more to fund a range of unrelated domestic spending measures including the ban on payments between branded and generic drugmakers which aim to delay generic competition to patent-expired innovative drugs.

While the Senate vote late last week approved the $60 billion requested in the House bill to fund the build-up of troops in Afghanistan, it rejected the other domestic funding measures aimed at alleviating the effects of the budget cuts by 46-51, in a procedural vote which required a 60-vote approval. Then, in a voice vote, Senators announced unanimous approval of their own version of the war funding bill, and sent it back to the House for approval.

The Senators had initially approved their own version of the bill in May, and the House now has to decide whether to take up the Senate version of the legislation or seek to make further changes. However, passage of a major spending bill before members of Congress leave for their summer recess, running August 9-September 12, is thought to be highly unlikely, and observers believe that if funding for domestic policy issues including the pay-for-delay ban cannot be hitched to other bills, they will be lost altogether.

Industry groups representing both the research-based and generic drug industries had condemned the inclusion of the patent settlement restriction in the House bill. The Generic Pharmaceutical Association (GPhA) described the move as “a clear display of politics over policy,” while the Pharmaceutical Research and Manufacturers of America (PhRMA) said that a blanket ban on patent settlement agreements is unnecessary because the Federal Trade Commission (FTC) and the courts, which already have the authority to review and evaluate such agreements, are in the best position to review them “on a case-by-case basis to ensure that they are not harmful to competition.”

However, the FTC estimates that such “collusive deals” cost consumers about $3.5 billion a year by delaying access to cheaper generics, and has repeatedly stressed that banning such agreements is one of its priorities. Also, the Congressional Budget Office (CBO) has said that ending such deals would save the federal government $2.4 billion over 10 years, as the Medicare and Medicaid programmes would pay lower prices for drugs.