California pay-for-delay ban upheld during appeal, rules Ninth Circuit

The US Court of Appeals for the Ninth Circuit has blocked generics makers’ request to halt California’s ban on pay-for-delay deals while they challenge the legislation.

In an order issued yesterday, February 24, the court denied the Association for Accessible Medicines’ request for an injunction pending appeal, and said the briefing schedule for the challenge remains the same.

The order is the latest setback for the association, which represents generic makers including Amneal, Dr. Reddy’s, and Teva.

The companies want to overturn legislation passed by the state of California last October, outlawing so-called ‘pay-for-delay’ deals.

California is the first US state to impose a ban on such deals, which involve patent owners paying generic makers to delay the launch of competitor drugs.

Governor Gavin Newsom said the ban is aimed at bringing down the cost of prescription drugs.

In 2010, the US Federal Trade Commission estimated that pay-for-delay deals cost US consumers $3.5 billion per year.

The Association for Accessible Medicines filed the appeal at the Ninth Circuit after the US District Court for the Eastern District of California denied its request to overturn the law.

The California district court said the association’s request was premature as the law, known as AB-824, had not yet been applied in any specific cases.

The US Chamber of Commerce co-authored an amicus brief in support of the generic makers, along with the Washington Legal Foundation and the National Association of Manufacturers.

According to the business groups, “most pharmaceutical patent settlements” are effectively outlawed under AB-824.

The Ninth Circuit’s order means the law will remain in effect while the drug companies’ appeal is ongoing.

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