Pay-for-Delay Deals in the Pharmaceutical Industry

In the pharmaceutical industry, the term “pay-for-delay” refers to the practice by brand-name drug makers of compensating their counterparts for delaying production and marketing of generic versions of those brand-name drugs. These types of agreements among competitors are particularly damaging to consumers as they delay the availability of cheaper, generic versions of the drugs in pharmacies. Consumers are often more likely to buy the generic version of drugs because they are equally as effective as the brand-name drug, but at a fraction of the price. For example, a brand-name medication that costs $300 per month might be available in a generic form for as little as $30 per month.

In 2013, the Supreme Court ruled that the Federal Trade Commission may challenge payments by pharmaceutical companies to their competitors for delaying generic production. More recently, in 2019, California became the first state to specifically ban pay-for delay agreements. While brand-name drug companies may be held accountable for these practices, many still take the risk of being brought to court by continuing the bad practice of bribing their competitors to delay entry into the generic market.

Pay-for-delay deals, also known as “reverse payments,” violate antitrust laws that are used to promote and protect fair business competition. At the Joseph Saveri Law Firm, we have successfully litigated on behalf of our clients and the classes they represent to ensure that they and all consumers are treated fairly and with their best interests in mind. Since 2012, our team of experienced attorneys has served as lead counsel and co-counsel in cases involving pay-for-delay agreements regarding the drugs Cipro, Lidoderm, Restasis, and Opana ER.

In one of our most successful pay-for-delay cases, we discovered that a group of generic drug manufacturers, led by Barr Laboratories Inc., accepted $398.1 million from Bayer AG to stay out of the lucrative ciprofloxacin antibiotic market from 1996 to 2003. This enabled Bayer, the pharmaceutical company producing the brand-name form of the drug, Cipro, to earn more than $1 billion from additional sales of its drug without competition from lower-cost generics. As a result of our successful antitrust litigation against these pharmaceutical companies, we were able to obtain a $399 million settlement on behalf of a class of Cipro consumer purchasers: a record for this type of case. And we were able to hold accountable a major pharmaceutical company wrongly paying competitors to delay bringing lower-price generic drugs to the market. Many legal experts, including the American Antitrust Institute, have recognized our diligent efforts and valuable contribution to the legal and medical communities in this ground-breaking case.

Our legal team centers its antitrust practice around maintaining healthy and legal business competition. Contact our team if you have knowledge of a pay-for-delay agreement or other unfair business practice in the pharmaceutical industry.