Californian Supreme Court allows Cipro pay-for-delay challenge
The Supreme Court of California has ruled that so-called “pay-for-delay” patent settlements can be challenged under state antitrust law in a case centering on Bayer’s antibiotic drug Cipro (ciprofloxacin).
The practice of pay-for-delay deals involves an innovator drug company paying a generic drug maker to end a patent challenge and keep its version of the drug off the market.
According to the judgment, Bayer had paid Barr Laboratories, now owned by Teva Pharmaceutical Industries, nearly $400 million to keep its generic version of antibiotic Cipro off the market between 1997 and 2003, when the main patent covering the drug expired.
Many parties had sued Bayer and Barr on a state and federal level, accusing them of anticompetitive behaviour. This case is the result of nine consolidated class action suits, and was stayed pending a decision on the federal challenges.
The US Court of Appeals for the Federal Circuit had previously found in favour of Bayer and Barr on federal antitrust claims, in a case decided under principles that were later rejected by the US Supreme Court in the 2013 pay-for-delay case between the US Federal Trade Commission and Actavis.
But, Judge Kathryn Werdegar said that the Californian Supreme Court had granted a review in this case to resolve “important unsettled issues of antitrust law”.
The plaintiffs in this case, indirect purchasers of Cipro, had accused Bayer and Barr of violating the Cartwright Act, California’s state antitrust law, as well as unfair competition and common law prohibition against monopolies.
The court unanimously reversed a decision by California’s 4th District Court of Appeal,and remanded the case for further consideration.
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