US Supreme Court ruling opens drugmakers to ‘pay-for-delay’ suits

pay for delay us supreme court (andrew magill http://www.flickr.com/photos/amagill/3366720659/)

Pay-for-delay agreements between brand and generic drugmakers should be subject to antitrust scrutiny, the Supreme Court has ruled. This means that a brand-name drugmaker can be sued for violation of antitrust laws if it agrees to pay generic drugmakers to delay putting their drug on the market.

The 5-3 vote should make it easier for the likes of the Federal Trade Commission (FTC) to challenge pay-for-delay deals, also known as reverse settlements, in the courts.

Pay-for-delay deals are thought to increase costs to American consumers by $3.5 billion dollars a year (Reuters). FTC Chairman Edith Ramirez said: "The Supreme Court's decision is a significant victory for American consumers, American taxpayers, and free markets."

However, most drug settlements may still be allowed, according to Reuters. JP Morgan analyst Chris Schott said: “While we believe the Supreme Court decision will open the door to broader FTC scrutiny of brand/generic settlements, we believe a majority of settlements will still be allowed even if reviewed by the FTC.”

Read the story from Reuters and PharmaTimes >

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