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Supreme Court rejects Rx 'pay for delay' challenge
March 8th, 2011
WASHINGTON – The Supreme Court has denied a request by pharmacy plaintiffs to review an appeals court ruling on a "pay for delay" settlement involving the antibiotic drug Cipro.
Without comment, the court on Monday dismissed a petition filed in December by Louisiana Wholesale Drug Co., CVS Pharmacy Inc., Rite Aid Corp. and Arthur's Drug Store Inc. to hear an appeal of an April 2010 decision by the U.S. Court of Appeals for the Second Circuit that upheld a more than decade-old settlement between drug makers Bayer and Barr Laboratories that delayed the introduction of a generic version of Cipro (ciprofloxacin).
Supreme Court Justices Sonia Sotomayor and Elena Kagan took no part in consideration of the petition, which requires the vote of four justices for the case to be reviewed.
In January, the National Association of Chain Drug Stores, consumer groups and a group of more than 30 states had filed briefs in support of the pharmacies' request for the high court to re-examine the appeals court ruling.
Under the 1997 settlement, Bayer AG agreed to pay Barr, now part of Teva Pharmaceutical Industries, $398 million to drop a patent challenge to Cipro and not market a generic version of the medication until six months before the branded drug patent expired.
Pay-for-delay settlements recently have come under fire from the federal government as it pushes ahead with health care reform, in which a key objective is providing consumers with ready access to lower-cost options for care and medication, such as generics.
In testimony at a congressional committee hearing in December, the Federal Trade Commission criticized such settlements, through which branded drug makers settle patent challenges by compensating generic competitors for not bringing a version of the medication to market for a certain period of time.
"The commission has made stopping pay-for-delay agreements a top priority because of the substantial harm to consumers from these deals," FTC competition bureau chief Richard Feinstein said in the testimony. "A recent FTC staff study found that they cost consumers about $3.5 billion a year."
In his fiscal 2012 budget proposed last month, President Obama sought to end pay-for-delay deals by giving the FTC the power to block such deals. The Obama administration estimated that barring such settlements would save the nation $540 million in 2012 and $8.8 billion between 2012 and 2021.