Generics Bill Passes House, Faces Senate Roadblock, Says Jefferies (WPI)
From Benzinga (July 6, 2010)
The "Preserve Access to Affordable Generics Act" was passed by the House of Representatives last week. The act was tacked onto a military appropriations bill. The bill passed along party lines.
The bill seeks to ban patent settlements between brand and generic companies.
Jefferies analysts think that the bill will meet its demise in the Senate. On top of over $30 billion for the military, Democrats tacked on $10 billion for education jobs and $5 billion for Pell Grants. These appropriations will make it even harder for the bill to pass the Senate.
The pharmaceutical industry, both generic and brand, are lobbying Senators to kill the bill. Jefferies thinks that if the bill passes, more patent cases will go the distance, and generics will lose more than they win, hence why they are opposing the bill also. Generic drug makers Teva (NASDAQ: TEVA) and Impax (NASDAQ: IPXL).
If the bill passes, Jefferies thinks Cephalon (NASDAQ: CEPH) stands to lose the most because of its poster-boy status for settlements.