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Open Season on Pay-To-Delay After New Supreme Court Decision

This week, the U.S. Supreme Court ruled in favor of consumers over drug companies by ruling that pay-to-delay tactics by pharmaceutical companies could violate antitrust laws. This could mean speedier access to low-cost generic drugs, greater prescription adherence among cash-strapped Americans, and lower healthcare payments for taxpayers.

In this landmark case, Federal Trade Commission vs. Actavis, the Court decided 5-3 that generic drug company Actavis may have violated federal anti-trust laws in accepting payment from a brand name drug company, Solvay Pharmaceuticals, to delay manufacturing a generic version of AndroGel. An important caveat of the decision is that patent settlements between drug companies are not unlawful by definition but that the law is flexible enough on a case by case basis to conclude that pay-to-delay is anti-competitive, and under some circumstances illegal.

The FTC has estimated that Americans spend an extra $3.5 billion each year because of pay-to-delay practices. If drug companies are deterred from attempting pay-to-delay agreements then more generics will be found on U.S. pharmacy shelves faster.  FTC Chairwoman Edith Ramirez summed up the decision: “The Supreme Court’s decision is a significant victory for American consumers, American taxpayers and free markets.”

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