States Ask Supreme Court To Review Pay-To-Delay

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kamala-harrisThe controversy over so-called pay-to-delay settlements between brand-name and generic drugmakers has prompted attorneys general from 32 states to file an amicus, or friend-of-the-court brief urging the US Supreme Court to review the deals, which the states say thwart competition and block needed access to lower-cost medications.

The move comes less than a month after three pharmacy chains and a wholesaler petitioned the court to rule on the issue, which has divided other federal courts (see this) and spurred the Federal Trade Commission into a Quixotic quest to urge Congress to pass a law to restrict these deals (back story).

The case that precipitated these filings involved a deal in which Bayer paid Barr Pharmaceuticals, which is now owned by Teva Pharmaceuticals, to drop its patent challenge to the Cipro antibiotic. Barr challenged the Cipro patent in October 1991 and struck a deal with Bayer in January 1997, about two weeks before the case was set to go to trial. The US Second Circuit Court of Appeals recently upheld the settlement (look here).

In their brief, the state attorneys general argue that a “surge” in pay-to-delay deals is “threatening the existence of generic competition” and, therefore, the availability of “affordable” meds to the states and their citizens; the deals thwart the congressional intent of the Hatch-Waxman Act to promote generic drugs to enter the marketplace; and that patent rights “do not include the right to pay competitors not to compete or to collude with competitors.”

“Our office is committed to putting an end to anticompetitive schemes like this that drive up drug prices in order to protect pharmaceutical companies’ profits,” says California Attorney General Kamala Harris (pictured above), in announcing the court filing (see statement).

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