A U.S. Supreme Court decision this week that the government can go after drug makers for profit-sharing settlements with generic drug companies may help lower drug costs and increase the number of generics on the market, say some observers.
On the other hand, if you believe the drug manufacturers, the decision could waste millions of dollars in litigation and stifle new generic drug patent challenges because of added administrative burden.
In any case, the decision in the case, Federal Trade Commission v. Actavis, will probably open the door to more government lawsuits, the New York Times
predicts.
In a 5-3 vote, the justices found that the FTC can sue to stop so-called “pay for delay” court settlements, inwhich drug companies pay off generic drug makers to prevent them from bringing rival generic competitors to market.
For the case in question, Solvay Pharmaceuticals, maker of the topical testosterone drug AndroGel, was paying millions annually to three generic drug companies under an agreement that they hold off introducing generic versions of the drug. The FTC sued saying the settlement was a violation of antitrust law.
“We look forward to moving ahead with the Actavis litigation,”
said FTC chairwoman Edith Ramirez, as well as other pursuing other pay for delay cases. The number of such arrangements has grown from three in 2005 to 40 in 2012,
USA Today reports.