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'Pay for delay' deals unlawful

Manufacturers of branded pharmaceuticals who pay generics companies to abandon patent challenges should be presumed unlawful

Manufacturers of branded pharmaceuticals who pay generics companies to abandon patent challenges should be presumed unlawful, according to the US Department of Justice. 

A New York federal appeals court asked the Department to give its view in a case brought by a number of drug purchasers. They are challenging an agreement in which Bayer paid Barr Pharmaceuticals to delay producing a generic version of the antibiotic Cipro. 

The position expressed by the Department is now in line with that of the Federal Trade Commission, which opposes such 'pay for delay' settlements. This marks a change under the Obama administration. 

Industry lobbying groups say that these deals resolve costly and lengthy patent litigation disputes, but members of the House of Representative and the Senate have proposed legislation to ban the practice.

7th July 2009

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