US: Judge says Actavis does not limit pay-for-delay to cash-only deals

Three pharmaceutical companies failed in their bid to have an antirust lawsuit dismissed this week, allowing unions and other groups across the nation to continue their pay-for-delay claims to move forward.

The judge, which rejected the motion to dismissed, added in his ruling that he does not believe the Supreme Court case limits illegal pay-for-delay deals to cash-only settlements.

Endo, Teikoku Seiyaku and Watson Pharmaceuticals had petitioned US District Judge William Orrick to toss the case on arguments that while an agreement between the companies delayed the entry of Watson’s generic version of a pharmaceutical, that entry was earlier than would have been otherwise.

The plaintiffs are accusing Endo and Teikoku of paying Watson to delay the entry of generic Lidoderm painkiller patches. According to reports, the claims say Endo and Teikoku agreed to drop patent infringement litigation against Watson and delay the entry of their own generic form of the medication in exchange for a 25 percent royalty on sales from Watson’s generic version.

Reports say that exclusivity deal was worth $170 million.

That agreement lead to the delay of cheaper, generic alternatives of the treatment until more than one year after the Federal Drug Administration approved Watson’s version in 2012, reports say.

Judge Orrick ruled Monday that the plaintiffs “plausibly allege that the provision of brand-name product was not precompetitive because it did not ‘increase output, reduce price, or increase consumer choice.’”

The judge also rejected the plaintiffs’ argument that Actavis only bans cash settlements in pay-for-delay agreements, meaning Endo and Teikoku’s giving of the brand name Lidoderm patches for Watson to sell can constitute an anticompetitive, illegal pay-for-delay agreement.

That rejection goes against an earlier decision by a New Jersey court.

Full content: Courthouse News Service

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