California bans pharma's infamous 'pay-for-delay' deals

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California Gov. Gavin Newsom signed a new bill banning "pay-for-delay" deals in pharma. (Pixabay)

When generic challengers come for a branded med’s patent, drugmakers have in the past chosen to pony up and stall their rivals with an anticompetitive pact better known as “pay for delay.” In an effort to keep drug prices down, California is looking to end the practice.

California Gov. Gavin Newsom signed a new bill Tuesday that will make California the first state to ban pay-for-delay deals in pharma.

The bill, AB 824, will make it unlawful for companies to exchange anything of value in return for a halt to patent challenges from generic drugmakers. That new measure could open the door to a range of civil suits against companies seeking to keep generic competitors off the market.

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“California will use our market power and our moral power to take on big drug companies and prevent them from keeping affordable generic drugs out of the hands of people who need them,” Newsom said in a statement.

RELATED: Teva's Cephalon to ink $65.8M class-action settlement in Provigil pay-for-delay suit after judge's OK

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