A trade group for generic drugmakers, the Association for Accessible Medicines, has filed a lawsuit against the attorney general of California for enacting a law banning "pay-to-delay" deals between drugmakers, according to STAT.
"Pay-to-delay" deals happen when a brand-name drugmaker settles a patent lawsuit by paying a generic drugmaker to delay launching its biosimilar so the brand-name company can sell its own drug without competition longer.
The Federal Trade Commission has said these kinds of deals cost U.S. consumers about $3.5 billion each year, according to STAT.
Last month, California passed a law banning all such deals. The association argues that the law is unconstitutional and will reduce competition and lead to higher drug prices. The pharma industry has argued the deals are legal and allow lower-cost generics to reach consumers faster rather than facing years of patent litigation.
The lawsuit alleges that pay-to-delay deals are often the only way to ensure lower-cost generics reach the market.
However, a spokesperson for California Attorney General Xavier Becerra said in a statement to STAT that the bill should "ultimately lower the cost of prescription drug prices and save lives."
An analysis from the California State Assembly's Committee on Judiciary said it is unlikely the law would stop pro-competitive settlements and that pay-for-delay settlements are only a small percentage of all settlements in patent infringement cases.
Patent settlements have gained a good deal of public attention in recent years, as AbbVie has settled patent lawsuits with several drugmakers trying to sell biosimilar versions of Humira, its rheumatoid arthritis drug. In July, the FDA approved a Humira biosimilar, but it won't be available in the U.S. until June 2023.
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