Busy day for the SCOTUS – good day for consumers

Today the United States Supreme Court ruled in a 5-3 vote that agreements between the companies that make name-brand and generic drugs to delay the generics’ availability can be illegal. Federal regulators can now sue drug companies for antitrust violations when those brand-name drug makers pay generic competitors to keep cheaper, rival copies of a drug off the market.

Generic Drugs and the SCOTUS

Image: Dreamstime

This is an outcome that is very welcome to consumer advocates because the decision is likely to benefit consumers by way of lower prices for prescription drugs. The Federal Trade Commission has called these deals “pay for delay” and estimates that they cost consumers and health plans approximately $3.5 billion each year. The SCOTUS didn’t address whether the pay for delay deals are in and of themselves  unlawful but they laid out circumstances under which antitrust officials could seek recourse.

In today’ opinion by Justice Stephen G. Breyer the Supreme Court effectively rejected the view held by lower courts that drug makers cannot be sued for antitrust violation as long as they are defending a patent whose 20-year life has not expired.

Breyer stated, “Settlement on the terms said by the FTC to be at issue here — payment in return for staying out of the market – simply keeps prices at patentee-set levels, potentially reducing the full patent-related $500 million monopoly return while dividing that return between the challenged patentee and the patent challenger…”The patentee and the challenger gain; and the consumer loses.”

{End of Quick News Bite!}


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