June 17, 2013 – In a 5-3 decision announced today, the U.S. Supreme Court ended the legal presumption that “pay for delay” agreements among branded and generic drug companies are legal. The decision will allow the Federal Trade Commission to challenge and block these agreements when it finds them to reduce competition from other generic drug companies.

“While not unexpected, this decision effectively will shorten the patent protection period for many drugs, shortening the time a company can recoup its development costs,” said Coalition Executive Director John Kamp. “While at least one major pharma Wall Street analyst has opined that many major patents will be unaffected, the ruling will kill most ‘pay for delay’ agreements.”

The FTC v. Actavis opinion, written by Justice Stephen Breyer, states that the Eleventh Circuit “erred in affirming the dismissal of the FTC’s complaint.

Although the court did not rule on whether “pay for delay” agreements were unlawful on their face, it did find that in this case, the payment from Solvay Pharmaceuticals – maker and patent holder for the testosterone gel, AndroGel – to Actavis represented an unlawful restraint of trade.

For previous coverage of this case, go to: http://www.cohealthcom.org/?p=1525