Supremes Turn Down Generic Payoff Case
Make a commentBy Ed Silverman // June 25th, 2007 // 11:16 am
Score one for ‘reverse settlement.’ The US Supreme Court won’t consider a lawsuit alleging Barr and AstraZeneca conspired to monopolize the market for the Tamoxifen breast cancer drug. Consumers and insurers argued the deal violated anti-trust law and resulted in higher costs.
Previously, the 2nd U.S. Circuit Court of Appeals upheld a federal judge, who found the deal wasn’t anti-competitive. And the US Solicitor General urged the Supreme Court not to step into the case, even though the government said the appeals court failed to apply the correct legal standard in analyzing the matter, the Associated Press reports.
The dispute began nearly 20 years ago when Barr abandoned a successful challenge to a patent lawsuit in exchange for the right to begin selling a generic tamoxifen under a distribution deal with AstraZeneca - before the patent expired. Barr also received a $21 million payment and AstraZeneca also agreed to pay $45 million over 10 years to Barr’s intended supplier.
Lawyers for the consumers and insurers say the arrangement resulted in tamoxifen remaining “a single-source, monopoly product,” with Barr distributing unbranded tamoxifen at a price 5 percent less than Zeneca’s Nolvadex brand. Generic drugs, lawyers for the consumers alleged, are usually priced 30 percent to 80 percent below brand-name products.
This morning’s action can’t please the Federal Trade Commission, which has vowed to fight ‘reverse settlement’ cases, as the payoffs are known in legal circles.