Federal Court Ruling Backs Pay For Delay

A federal court in Atlanta has dismissed a Federal Trade Commission lawsuit alleging that Solvay Pharmaceuticals conspired with several generic drug manufacturers to postpone generic competition for its testosterone-replacement drug AndroGel. Last year, FTC charged that Solvay had entered into an illegal agreement with Watson Pharmaceuticals and Par Pharmaceutical and paid them a share of its AndroGel profits in return for a promise that they would not introduce a generic competitor until 2015.The generic companies also agreed to drop their challenge to Solvay's patent for the drug, which expires in 2020 (C&EN, Feb. 9, 2009, page 24). FTC has long opposed such "pay for delay" arrangements, arguing that they violate antitrust law and cost U.S. consumers billions of dollars annually. But U.S. District Court Judge for the Northern District of Georgia Thomas W. Thrash Jr. dismissed FTC's challenge, citing previous court rulings that allowed settlements similar to the one reached by the drugmakers in this case. "This decision, along with several other prior court decisions in similar suits brought by FTC, reaffirms the procompetitive and proconsumer nature of patent settlements," says Kathleen Jaeger, president of the Generic Pharmaceutical Association, an industry trade group.