SPECIALTY RX FACTS

8Mar/110

Pay to Play Generic Pharmaceuticals Law Suit Declined

The U.S. Supreme Court has put a damper on opposition to "pay-for-delay" patent settlements. The high court refused to hear a challenge to a patent deal between Bayer and Barr Pharmaceuticals covering the German drugmaker's antibiotic Cipro. That deal has been the subject of an intense, closely watched antitrust battle between drug purchasers--who allege such patent deals are anticompetitive, and cost patients and payers big money to boot--and the two companies, who've defended their arrangement.

Back in 1997, Bayer agreed to pay Barr $398 million to wait to sell a copycat version of Cipro until June 2003. That was six months before a key patent expired, PharmaTimes reports. A drug wholesaler and pharmacies sued, saying that the settlement was illegal under antitrust law. The courts ruled that the deal didn't break antitrust rules; Bayer argued that the settlement actually ended up benefiting consumers because Barr's version was launched before Cipro's patent expired.

The Federal Trade Commission has been on a crusade against pay-for-delay deals, and European antitrust regulators have been probing patent settlements in the EU, too. As PharmaTimes notes, President Obama has proposed a ban on these sorts of patent settlements, saying it would save the federal government up to $8.8 billion over 20 years. Both branded drugmakers and generics firms, of course, oppose a ban.

 

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