In a closely watched battle, California officials convinced a federal judge to modify a temporary hold on a law that bans so-called pay-to-delay deals between pharmaceutical companies, a contentious issue that has factored into the larger debate over the cost of prescription medicines. But as a practical matter, the ruling likely amounts to an empty victory for the state, because little may change.
At issue is a law that went into effect in the fall of 2019 that made California the first state in the nation to outlaw pay-to-delay deals, a step California officials said was necessary to prevent drug companies from thwarting competition and maintaining higher prices. The move was also significant because California is generally seen as a bellwether state.
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.
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