Healthcare Business News

AMA joins brief opposing 'pay-for-delay' deals

By Modern Healthcare
Posted: January 31, 2013 - 11:00 am ET

The American Medical Association joined healthcare and consumer groups calling on the U.S. Supreme Court to limit the ability of drugmakers to enter agreements that keep generic competition off the market.

The Federal Trade Commission has been battling what it calls “pay-for-delay” agreements in court with limited success for several years, arguing they illegally deny consumers the benefits of competition.

The case at issue, FTC v. Watson Pharmaceuticals, is scheduled for oral arguments before the court March 25. The physicians group signed onto a friend-of-the-court brief (PDF) with AARP, the National Legislative Association and U.S. Public Interest Research Groups.

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“The AMA believes that pay-for-delay agreements undermine the balance between spurring innovation through the patent system and fostering competition through the development of generic drugs,” AMA President Dr. Jeremy Lazarus said in a news release. The AMA's House of Delegates in November adopted a policy to urge making such agreements explicitly illegal.

Watson and Par Pharmaceuticals filed lawsuits challenging the patent for a topical synthetic testosterone called AndroGel, a product of Abbott Laboratories subsidiary Solvay Pharmaceuticals. Solvay ultimately agreed to pay the companies $42 million a year to settle the litigation and keep generic versions of Androgel off the market until 2015.

The FTC challenged the agreements and lost in the district court and again before the 11th U.S. Circuit Court of Appeals in Atlanta before appealing to the Supreme Court.

“If Watson remains controlling law and allows exclusion payments between brand-name and generic firms through patent litigation settlements, these settlements will increase and consumers will continue to pay more for vital drugs,” the AMA and other organizations argued in the brief.

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