Supreme Court votes to allow ‘pay-for-delay’ generic drug deal challenges

06/17/2013 // West Palm Beach , Florida, US // JusticeNewsFlash // Justice News Flash // (press release)

Washington – The Supreme Court has ruled that deals made between pharmaceutical companies and generic drug makers can be illegal and subject to being challenged in court. As reported by the Associated Press (AP), the justices voted 5-3 in the decision regarding what government officials assert prevent cheaper forms of some drugs from being placed in the market.

The ruling allows government inspections and challenges to what are regarded as “pay-for-delay” deals. Also known as “reverse settlements,” these result from generic drug makers filing a challenge at the Food and Drug Administration to patents on brand-name drugs that are held by pharmaceutical companies for 20 years. Deals often result that allow the generic drug company to sell cheaper drug versions after an agreed upon time period, and include a considerable payment as part of the settlement.

Paul Bisaro, president and CEO of Actavis, is quoted by the AP as stating of the court’s decision, “Rather, the court has established that the ‘rule of reason’ be applied, and left it to the lower courts to determine if the benefits of the settlement outweigh harm to consumers…We believe this decision continues to provide for a lawful and legitimate pathway for resolving patent challenge litigation in a manner that is pro-competitive and beneficial to American consumers.”

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