Generic drug trade group loses bid to block California pay-to-delay law

A federal appeals court denied a bid by generic drug trade group Association for Accessible Medicines to block a California law banning pay-to-delay deals between drugmakers. 

In a July 24 ruling, the U.S. Court of Appeals for 9th Circuit said the trade group failed to show there was a “substantial risk” that the law would cause drugmakers to suffer an injury that is “concrete, particularized, and imminent.”

Pay-to-delay deals happen when a brand-name drugmaker pays a generic drugmaker to delay launching a generic version of a drug so the brand-name drugmaker can continue selling it without competition for a longer period of time. 

The Federal Trade Commission has said such deals cost U.S. consumers about $3.5 billion annually. 

California became the first state to outlaw such deals in October 2019. 

The Association for Accessible Medicines filed a lawsuit in November 2019 against Xavier Becerra, California’s attorney general, arguing pay-to-delay rules are legal and allow generics — which are cheaper than brand-name drugs — to reach consumers faster by skipping years of patent litigation. 

Jeffrey Francer,  interim CEO of the association  told STAT: “California’s law has made it more difficult for patients to access more affordable generic and biosimilar medicines.  We are examining the 9th Circuit’s ruling and will take necessary action to bring more affordable medicines to patients.”

Mr. Becerra released a statement saying the ruling is “a win for every family who has unfairly shouldered higher prices for lifesaving medicine simply because pharmaceutical companies staved off competition to pocket higher profits.”

The July 24 ruling marks the second time the association has lost an argument that California’s law violates the dormant commerce clause of the U.S. Constitution. 

Find the full ruling here

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