FTC Can Sue Firms In 'Pay For Delay' Drug Deals, Court Rules
When the maker of a brand-name drug pays a maker of generic drugs to not produce a lower-priced version of their product, the Federal Trade Commission can challenge the arrangement on antitrust grounds, the Supreme Court ruled Monday. The ruling may end the era of what regulators call "pay-for-delay" deals.
The justices voted 5-3 to allow a case to go forward in which the FTC is challenging one of many such deals. Several companies are involved in the case, including Solvay Pharmaceuticals, maker of AndroGel, and generic-drug maker Actavis.
The arrangement stemmed from an FDA filing by Actavis and another company, in which they asserted a right to produce a generic version of AndroGel. As the FDA was reviewing the case, Solvay sued Actavis to claims of patent infringement.
Here's how the Supreme Court's ruling, issued today, describes what happened next:
"The FDA eventually approved Actavis' generic product, but instead of bringing its drug to market, Actavis entered into a 'reverse payment' settlement agreement with Solvay, agreeing not to bring its generic to market for a specified number of years and agreeing to promote AndroGel to doctors in exchange for millions of dollars."