Retirees interest group supports California’s pay-for-delay ban

The AARP (formally the American Association of Retired Persons) has urged the US Court of Appeals for the Ninth Circuit to uphold a newly-formed California law prohibiting the majority of pay-for-delay pharmaceutical settlements.

In an amici curiae filing on Thursday, March 5, at the United States District Court for the Eastern District of California, AARP argued that the “district court’s denial of a preliminary injunction should be affirmed”.

Following the passing of the 2019 law, as of the start of this year pharmaceutical companies must prove that their pay-for-delay deals (large drugmakers compensating generic-producing counterparts for delaying marketing their own versions) don’t hinder competition.

“California enacted its pay-for-delay law to address the health and affordability crisis caused by the ever-escalating price of prescription drugs,” said AARP’s contribution.

“This law is in the public interest because it promotes competition while helping consumers gain timely access to lower-cost generic drugs. Thus, a decision enjoining the law would neutralise a key weapon in the government’s arsenal to combat anticompetitive conduct that harms consumers,” it added.

“In the end, it is consumers, and not the parties to the settlements, who ultimately pay for anticompetitive activities delaying generic drugs from entering the market,” said AARP’s contribution.

AARP argued that law AB 824 protects consumers by getting them timely access to the lower-cost generics they need, while higher prices and less competition lead to fewer consumer options, expensive medications, and patients not adhering to prescribed dosages because they can’t afford the cost.

In February this year, the US Court of Appeals for the Ninth Circuit blocked generics makers’ request to halt the ban on pay-for-delay deals while challenges to the legislation continue. 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 was the latest setback for the association, which represents generic makers including Amneal and Teva. California is the first US state to impose a ban on such deals

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

According to a recent Association for Accessible Medicines report, traditional generic savings totalled $293 billion in 2018, with 10-year savings amounting to nearly $2 trillion.

Across the US, more than four billion generic prescriptions were filled in 2018, said the report, amounting to 90% of dispensed prescriptions, an increase from 75% in 2009.

However, generics account for only 22% of total drug spending, added the report, “as a result, the future affordability of medicines for patients is inextricably linked to the success of the generic and biosimilar industry”.

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