California Supreme Court agrees to hear challenge to Bayer’s pay-for-delay agreement

On Wednesday 15 February 2012 the California Supreme Court agreed to consider whether pharmaceutical company Bayer Corporation has violated California’s antitrust (competition) laws by entering a ‘pay-for-delay’ agreement with would be generic manufacturers of Cipro, an antibiotic. It is alleged that Bayer agreed to pay $398.1 million to several generic drug manufacturers on the understanding that those generic manufacturers would not produce generic versions of Cipro from 1997 to 2004.

The Cipro pay-for-delay agreement was met with a series of legal

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challenges. Until now,

those challenges had been largely unsuccessful. Opponents’ to these agreements (including the US Federal Trade Commission) were disheartened in March 2011, when the US Supreme Court refused to consider an appeal against the decision of the 2nd US Circuit Court of Appeals which found that the Cipro agreement did not breach antitrust law.

While there is no guarantee that the California Supreme Court will interpret or apply antitrust law differently to other courts that have dismissed the claims against Bayer, another opportunity to set out the case against Bayer has been heralded as a legal and political win for pay-for-delay opponents. We will be watching the proceedings with interest.

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