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Foes Of 'Pay For Delay' Drug Settlements Turn To State's High Court

Publication Date: 
January 20, 2012
The Recorder
Kate Moser

Professor Mark Lemley spoke with The Recorder's Kate Moser on antitrust concerns that arise when pharmaceutical patent holders pay companies to put off their production of generic medications.

A class of consumers challenging so-called "pay for delay" drug settlements is asking the California Supreme Court to swallow a big pill.

They want California's high court to be the first to say that pharmaceutical patent holders violate antitrust laws when they pay competitors to put off the potential release of generic medicines — a lucrative practice the Federal Trade Commission says costs consumers $3.5 billion a year in inflated drug prices.


Mark Lemley, director of Stanford Law School's Program in Law, Science, and Technology, represented 78 law, economics, business and public policy professors as amicus curiae in the court of appeal.

"Companies shouldn't be able to pay their competitors to stay out of the market," Lemley said in an email. "But the federal courts have proven unwilling to restrict the practice. The California court of appeal followed the federal courts. So the issue for the Supreme Court is whether to do the right thing when doing the right thing means saying that California law diverges from federal law."