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Supreme Court: Drugmakers’ Pay-for-Delay Deals Can Be Illegal

Posted By Kim Keister On June 17, 2013 @ 3:43 pm In Washington Watch | Comments Disabled

Deals between brand-name drugmakers and their generic drug competitors that keep cheaper products off the market might illegally prevent competition, the U.S. Supreme Court ruled June 17.

SCOTUS [1]In so-called pay-for-delay deals [2] or reverse settlements, a patent holder pays a would-be competitor not to sell a generic version of a drug for a specified period of time. The brand-name manufacturer can continue to charge monopoly prices, and the generic company is compensated for inaction.

In Federal Trade Commission v. Actavis, the government sued drug companies over one such deal. The Justice Department asked the court to rule that all pay-for-delay deals are illegal, but Justice Stephen Breyer, who wrote the opinion for the court’s 5-3 majority, said that was going too far. (Read the full decision here. [3]) The deals’ “complexities lead us to conclude that the FTC must prove its case” one at a time, Breyer wrote.

Related: Does a Top Drugmaker’s Playbook Stifle Competition? [4]

Fallout from such arrangements “reverberates throughout the health care system – including Medicare and Medicaid – and is especially burdensome for consumers,” AARP said in a statement [5] applauding the court’s decision. AARP, which filed a friend-of-the-court brief [6] in the case, said it hopes the ruling “will lead to an end to such agreements [5] and that ultimately courts will find them anticompetitive and illegal.”

In a statement FTC Chairwoman Edith Ramirez called the decision “a significant victory for American consumers, American taxpayers and free markets.”

The FTC estimates [7] that pay-for-delay agreements cost American consumers $3.5 billion per year.

 

Also of Interest

 

See the AARP home page [11] for deals, savings tips, trivia and more

 


Article printed from AARP: http://blog.aarp.org

URL to article: http://blog.aarp.org/2013/06/17/court-pay-for-delay-deals-between-drug-companies-can-be-illegal/

URLs in this post:

[1] Image: http://blog.aarp.org/wp-content/uploads/2011/09/supreme_court_of_the_united_states.jpg

[2] pay-for-delay deals: http://blog.aarp.org/2013/05/13/pay-for-delay-agreements-and-prescription-drug-costs/?intcmp=AE-BLIL-BL

[3] Read the full decision here.: http://www.supremecourt.gov/opinions/12pdf/12-416_m5n0.pdf

[4] Does a Top Drugmaker’s Playbook Stifle Competition?: http://blog.aarp.org/2013/06/17/how-pfizer-protected-lipitor-profits-as-patent-expired-pay-for-delay/?intcmp=AE-BLIL-BL

[5] AARP said in a statement: http://www.aarp.org/about-aarp/press-center/info-06-2013/AARP-Reacts-to-Supreme-Court-Decision-on-Pay-for-Delay.html

[6] friend-of-the-court brief: http://www.aarp.org/content/dam/aarp/aarp_foundation/litigation/pdf-beg-01-09-2013/FTC-v-Watson.pdf

[7] estimates: http://www.ftc.gov/os/2010/01/100112payfordelayrpt.pdf

[8] Surprising Good Side Effects of Your Meds: http://www.aarp.org/health/drugs-supplements/info-06-2013/surprising-good-side-effects-of-meds.html?intcmp=AE-ENDART1-BL-REL

[9] Brand Name Drugs Driving Up Medicare Spending?: http://blog.aarp.org/2013/06/11/brand-name-drugs-driving-up-medicare-costs-generic-drug-requirements/?intcmp=AE-ENDART2-BL-BOS

[10] Join AARP: https://appsec.aarp.org/MSS/join/application?intcmp=AE-ENDART3-BL-MEM

[11] AARP home page: http://www.aarp.org/?intcmp=AE-ENDART3-BL-HP

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