Supermarket chain settles pay-for-delay suit over birth control pill
Dutch supermarket owner Ahold Delhaize has agreed to settle a series of patent infringement suits filed against pharmaceutical companies including Warner Chilcott and Watson over contraceptive pill Loestrin 24 Fe.
According to Ahold, Warner Chilcott, purchased and absorbed by Actavis (now Allergan) in 2013, agreed pay-for-delay deals with Watson and Lupin to keep generic versions of the birth control pill off the market.
Ahold’s US subsidiary, which owns supermarket brands including Giant Food and Food Lion, sued the pharma companies seeking damages for the higher prices charged as a result of the deals.
According to court documents filed this week, the parties have now agreed to settle the dispute.
In a letter to the US Court of Appeals for the First Circuit, Ahold’s attorney informed the court that the parties had reached a binding memorandum of understanding and settlement agreement.
The terms of the settlement were not disclosed in the court documents.
In 2016, the First Circuit ruled that pay-for-delay settlements involving Warner Chilcott may be in breach of competition law, despite the deals not involving cash.
As reported by LSIPR at the time, the agreements with Watson and Lupin involved exclusive licensing agreements in exchange for the companies dropping infringement claims against Warner Chilcott and delaying generic versions of the Loestrin contraceptive pill.
In 2014, the US District Court for the District of Rhode Island dismissed challenges to the legality of the agreements on the basis that the cited competition laws only applied to cash payments.
But the First Circuit revived the claims on the basis that this was an overly narrow interpretation of Supreme Court precedent on the issue.
According to the First Circuit, US competition law “acknowledges that competition scrutiny attaches not only to pure cash reverse payments, but to other forms of reverse payment that induce the generic to abandon a patent challenge, which unreasonably eliminates competition at the expense of consumers”.
Warner Chilcott was acquired by Actavis in 2013. Actavis subsequently merged into Allergan in 2015.
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