Pay-to-delay deals happen when a brand-name drugmaker settles a patent lawsuit by paying a generic rival to delay launching a copycat drug until a specific date in the future, giving the brand-name drugmaker more time to sell its drug without lower-cost competition.
The FTC has said such deals cost U.S. consumers about $3.5 billion per year.
California passed a law in October to ban pay-to-delay deals, and the Association for Accessible Medicines, a trade group for the generic drug industry, filed a lawsuit in November to try to block the law from being enacted.
The law is the first of its kind, and if it remains, could motivate other states to pass similar laws, according to STAT.
AAM and the pharmaceutical industry say pay-to-delay deals are legal and allow lower-cost generic drugs to reach the market sooner. California’s law violates the dormant commerce clause of the Constitution by directly regulating out-of-state conduct and the constitutional prohibition of excessive fines, the AAM claims
.However, U.S. District Judge Troy Nunley wrote in a Dec. 31 order that AAM has not “sufficiently shown [the law] is likely to be enforced in an unconstitutional manner.”
Read the full article here.
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