New pay-for-delay lawsuits are popping up around the country. Endo Pharma ($ENDP) and Actavis ($ACT) have been named, as has AstraZeneca ($AZN), Teva ($TEVA), Ranbaxy and Dr. Reddy's. And with the U.S. Supreme Court having defined its position this year, the pay-for-delay legal issue is being litigated under a whole new set of rules.
In Boston Thursday, a federal judge allowed insurance companies and union health plans to join forces in a class action against AstraZeneca, Teva, Dr. Reddy's Laboratories and Ranbaxy Laboratories for reaching a settlement to protect AstraZeneca's stomach pill Nexium from generic competition, Bloomberg BusinessWeek reports. The case alleges AstraZeneca was able to hold off generics for 6 years. The judge also denied the British drugmaker's request to keep everything under seal because it wanted to avoid embarrassment over revealing relationships that favored some buyers over others.
Endo has been sued by Puerto Rican pharmaceutical wholesaler Drogueria Betances in Pennsylvania and a union health and welfare fund in California, Law360 reports. The suits are both seeking class-action status, but for different groups. Both also allege that a settlement between Endo and Actavis meant a generic of the Lidoderm pain patch was delayed for a year, resulting in higher prices for everyone downstream of the drugmakers.
The industry has for years argued that the settlements reached with generic drugmakers to set aside challenges to their patents actually speed generics to market rather than impeding competition. But the U.S. Supreme Court in June reversed a circuit court ruling that shielded the companies from most lawsuits challenging their patent deals. It also said the Federal Trade Commission (FTC) could pursue antitrust cases against the makers, opening the gates for more suits from both the government and private parties.
And the FTC intends to do just that. Law360 reports that new FTC Chairwoman Edith Ramirez has indicated it will remain a big priority. The FTC earlier this year reported that settlements have been growing, giving the FTC and other potential plaintiffs, like wholesalers and union funds, more targets. It found that in fiscal 2012, drugmakers wrapped up 40 patent settlements, up from 28 the year before.