California court sides with consumers in generic drug fight

SAN FRANCISCO (AP) – California’s Supreme Court has ruled that settlement agreements that keep cheaper, generic drugs off the market may be illegal if they include excessive cash payments.

The court ruled unanimously Thursday that such “pay-for-delay” deals between brand-name and generic drugmakers can violate the state’s anti-trust law. Plaintiffs, however, must show any cash payment exceeds the value of legal costs and any other products and services the generic drugmaker has agreed to provide.

The decision comes in a challenge to a $398 million settlement between drugmakers Bayer and Barr Laboratories over the antibiotic Cipro. Barr agreed to postpone marketing its generic Cipro until Bayer’s patent expired.

Consumer advocates say such deals add billions to the drug bills of American patients and taxpayers.

A call to an attorney for Barr was not immediately returned.

(Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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