'Pay-to-delay' generic drug settlements may be illegal, says US Appeals Court, but upholds Cipro case

30 April 2010

A US appeals court yesterday invited deeper legal review of patent settlements by pharmaceutical companies that pay rivals to delay the introduction of generic drugs, the so-called 'pay-to-delay' deals.

However, the three-judge panel of the 2nd US Circuit Court of Appeals in New York upheld a lower court's ruling dismissing objections to German drug major Bayer AG paying Israeli-owned Teva Pharmaceutical Industries' Barr Laboratories subsidiary to prevent it bringing to market a version of the quinolone antibiotic Cipro (ciprofloxacin).

Citing a legal precedent in a 2005 ruling over the breast cancer drug tamoxifen, the court said the objectors - labor unions and pharmacies - could ask for a rehearing. The court invited review by a full panel of judges because of the "exceptional importance" of the antitrust implications.

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