Top US court to rule on pact among pharma firms to delay generics launch

The US Supreme Court is to rule on whether  drug makers violate anti-trust laws - and push higher costs on to consumers - by allowing makers of branded drugs pay to delay introducing lower-priced generics.
 
The last decade has seen several federal courts uphold such agreements on the grounds that they were patent settlement disputes.

The Federal Trade Commission (FTC), however, sees these  'pay-for-delay agreements' as illegally stifling competition and preserving monopolies. Last year, according to the agency, 28 such deals ended up costing consumers and taxpayers at least $3.5 billion in artificially higher prices.

According to FTC chairman Jon Leibowitz, consumers lose when drug companies agree not to compete.

The Supreme Court yesterday said it would rule early next year on whether a deal between Solvay Pharmaceuticals Inc and Watson Pharmaceuticals Inc could be challenged under federal antitrust laws.

Testosterone booster AndroGel maker, Solvay had agreed to a payment of $19 million a year to Watson to help market the drug against Watson's promise to not introduce a competitive pill until 2015, when Solvay's patent over the drug expired.

The California Supreme Court also has a similar case pending. The office of the state attorney general intervened in a lawsuit against Bayer over a deal aimed at delaying a generic version of its Cipro antibiotic drug.