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Pharma Pay-For-Delay Deals Called ‘Cost of Doing Business’ - Intellectual Property News

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Intellectual Property News

Posted on: Feb 26, 2020

Intro by John Bishop, Cohen Garelick & Glazier PC

In 2019, the State of California settled with Teva Pharmaceuticals for $69 million as a result of Teva paying a drugmaker to keep a generic version of the narcolepsy drug Provigil off the market. This so called “pay-for-delay” type of practice is often criticized for causing in part the occasional astronomical costs of pharmaceuticals for consumers.

While the California Attorney General has touted the settlement as the largest ever state settlement reached over a pay-for-delay deal, it accounts for only 6% of the $1.1 billion in revenues reaped by Provigil in 2010.  These settlements which at a distance seem huge, are criticized as being merely a cost of doing business by big pharma. In order to quell these actions further, California’s Assembly Bill 824, signed in October 2019, declares that any reverse payment (i.e. pay-for-delay) is “presumed to have anticompetitive effects” under the state’s Cartwright Act; the new law imposes fines of up to $20 million per violation.

Read more from Bloomberg Law here.

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