A federal judge dealt the pharmaceutical industry a setback by declining to block a new California law that bans so-called pay-to-delay deals between drug makers, prompting an industry trade group to pursue an appeal with a higher court.
The move comes after the Association for Accessible Medicines filed a lawsuit two months ago to thwart the state law, which was the first in the nation to outlaw pay-to-delay deals. California officials explained the step was necessary in order to prevent drug companies from thwarting competition and maintaining higher prices for medicines.
In these deals, a brand-name drug maker settles a patent lawsuit by paying cash or transferring something else of value to an erstwhile generic rival, which agrees to delay launching a copycat medicine until a specific date in the future. This gives the brand-name drug maker more time to sell its medicine without lower-cost competition.