US Supreme Court backs Bayer settlement deal with Teva on Cipro

In a long-running legal battle, the US Supreme Court has rejected a challenge to a 1997 settlement in which German drug major Bayer AG (BAY: DE) paid Barr Pharmaceuticals, now a subsidiary of Israel's Teva Pharmaceutical Industries (Nasdaq: TEVA), to not market a generic version of its antibiotic Cipro (ciprofloxacin).

The so-called 'pay-for-delay' deal was challenged by a number of pharmacies, which appealed to the Supreme Court in the case dubbed Louisiana Wholesale Drug v Bayer, 10-762. More than 30 states and various consumer groups supported the appeal. The justices refused to review the federal appeals court ruling that upheld the dismissal of a legal challenge to a deal between Bayer and Barr, without comment. The justices have denied several similar appeals on the issue in recent years.

Last year, the US Federal Trade Commission - which strongly opposes such deals which it estimates cost US consumers as much as $3.5 billion a year in higher prescription drug prices - filed an amicus brief in the US Court of Appeals for the Second Circuit, recommending that it hold a rehearing before all the judges ("en banc") of the ciprofloxacin "pay-for-delay" case (The Pharma Letter May 27, 2010).