Appeals court upholds decision to OK ‘pay-for-delay’ deals
NEW YORK The federal government got a kick in the face Thursday as an appeals court ruled in favor of patent litigation settlements between branded and generic drug companies.
The U.S. Second Circuit Court of Appeals in New York decided not to reconsider a ruling it made earlier this year in the case of Arkansas Carpenters Health and Welfare Fund vs. Bayer AG. The case concerned the legality of a settlement between Bayer and Teva Pharmaceutical Industries subsidiary Barr Labs over the anthrax treatment Cipro (ciprofloxacin), but the court ruled that the deal between the two companies did not violate antitrust laws.
The appeals court’s decision is a major setback for the efforts of the Federal Trade Commission and members of Congress who have sought to ban such settlements.
In most cases, a generic drug company that wishes to market its version of a drug before the branded drug company’s patents expire will file an approval application with the Food and Drug Administration with a paragraph IV certification, a legal assertion that the patents covering the branded drug are invalid, unenforceable or won’t be infringed by the generic drug. In response, the branded drug company usually will sue, but cases frequently result in settlements whereby the generic drug company agrees to hold off launching its drug in exchange for payment of some sort by the branded drug company.
This often comes in the form of an agreement not to use an authorized generic, essentially the branded drug marketed under its generic name, to compete with the generic drug company during its customary six-month market exclusivity period. Legally, the generic company must launch before the patents expire or as soon as they do, and delaying launch after patent expiry would be illegal, though critics such as the FTC and The New York Times’ editorial board have often derided the settlements as “pay-for-delay” deals, with the FTC contending that they cost consumers billions of dollars a year. Nevertheless, most cases that are settled result in launch of the generic drug ahead of patent expiry. In the case of Bayer and Barr, Bayer paid Barr $400 million to hold off launching its version of Cipro.
“Patents, issued by the government, are given the presumption of validity,” read a statement from the Generic Pharmaceutical Association, the generic drug industry’s main lobby. “Any market entry of a generic drug before the brand patent expires –– whether as the result of a finding that the generic product does not infringe the patent, that the patent is not enforceable or through a patent settlement agreement with the brand company –– is a positive, cost-saving event for consumers.”
Abbott acquires Piramal’s Healthcare Solutions business
ABBOTT PARK, Ill. Abbott has gained a foothold in the Indian drug market through its acquisition of the Healthcare Solutions business from Piramal, Abbott said.
Abbott announced Wednesday that it had completed its acquisition of the business, saying it would further accelerate its growth in emerging markets, which currently account for more than 20% of its sales. The company expects its pharmaceutical sales in India to be more than $2.5 billion by 2020.
“The acquisition of Piramal’s Healthcare Solutions business further strengthens Abbott’s growing presence in emerging markets,” Abbott chairman and CEO Miles White said. “Piramal’s portfolio of well-known, trusted products has served patients in India for decades.”
Shire, Acceleron Pharma ink development deal
CAMBRIDGE, Mass. British drug maker Shire is working with Cambridge, Mass.-based Acceleron Pharma to develop treatments for serious muscular disorders, Shire said Thursday.
The drug maker announced that the two companies would investigate ACE-031, a drug in mid-stage clinical trials as a treatment for Duchenne muscular dystrophy, a rare and fatal muscle disorder with no current treatment. The drug belongs to a class known as activin receptor type IIB, or ActRIIB molecules.
The two companies will work together to advance ACE-031 into a global phase-2 and -3 clinical program designed to demonstrate disease modification in patients with DMD.
Under the agreement, Shire will pay Acceleron $45 million upfront, and the latter company will be eligible for milestone payments of up to $453 million for ACE-031 and other molecules. If the drug manages to win regulatory approval, Acceleron will have rights to commercialize it in the United States and Canada, while Shire will have rights in other countries.