US Appeals Court ruling on "pay-for-delay" settlements slammed by GPhA

In a US Court of Appeals for the Third Circuit in Philadelphia ruling in a case brought by a number of drug wholesalers and retailers against Merck & Co’s (NYSE: MRK) legacy company Schering-Plough and two generics firms, which had agreed a patent settlement - referred to as “pay-for-delay” deals - relating to Schering-Plough's K-Dur (potassium chloride), used in the prevention and treatment of hypokalemia, the court said that these deals were anti-competitive and the burden is on the defendant to prove otherwise.

Commenting on the ruling, the US Generic Pharmaceutical Association (GPhA)said it believes the Court's decision is inconsistent with previous federal court rulings, which have time and again found patent settlements to be a lawful and valuable tool for bringing affordable medicines to market sooner than otherwise would be possible.

Ralph Neas, president and chief executive of the GPhA, said: "Pro-consumer patent settlements have never prevented competition beyond a patent's expiration. Indeed, they have resulted in making lower-cost generics available months and even years before patents have expired, saving consumers billions of dollars."