AMA Wire

Wednesday, June 26, 2013

This Week's News

Supreme Court: Pay-for-delay drug agreements need greater oversight

Supreme Court: Pay-for-delay drug agreements need greater oversight

Financial agreements that postpone the release of more affordable generic medications likely will come under greater federal scrutiny following a ruling by the Supreme Court of the United States last week.

In Federal Trade Commission (FTC) v. Watson Pharmaceuticals, the Supreme Court confirmed that the FTC has the authority to challenge anti-competitive agreements between pharmaceutical companies that deny patients access to affordable generic medications.

"There must be oversight of drug manufacturers as they increasingly use 'pay-for-delay' agreements to keep affordable generic medications off the market," AMA Immediate-past President Jeremy A. Lazarus, MD, said in a statement. "Pay-for-delay agreements cannot be allowed to artificially inflate health care costs or obstruct physicians' ability to treat their patients with necessary medications."

The AMA, alongside the AARP and other organizations, filed a friend-of-the-court brief, which argued that pay-for-delay agreements prevent both market competition and patient access to low-cost treatment options.

"The court has made it clear that pay-for-delay agreements between brand and generic drug companies are subject to antitrust scrutiny, and it has rejected the attempt by branded and generic companies to effectively immunize these agreements from the antitrust laws," FTC Chairwomen Edith Ramirez said in a statement. "With this finding, the court has taken a big step toward addressing a problem that has cost Americans $3.5 billion a year in higher drug prices."

Additional details about the case are available on the Litigation Center of the AMA and State Medical Societies' antitrust litigation Web page.