Northern California Record

Friday, January 17, 2020

CJAC expects more lengthy and costly lawsuits in wake of new 'Pay-for-Delay' bill


By Rich Peters | Oct 28, 2019


SACRAMENTO – Gov. Gavin Newsom last week signed Assembly Bill 824, known as the “Pay-for-Delay” bill, a new law that will block pharmaceutical companies from paying generic drug makers to not develop and bring lower-cost medicines to market. 

The Federal Trade Commission says that the “reverse payment” settlements that stemmed from these issues cost consumers $3.5 billion a year. This bill has been angled to address that sum.

“This bill would provide that an agreement resolving or settling, on a final or interim basis, a patent infringement claim, in connection with the sale of a pharmaceutical product, is to be presumed to have anticompetitive effects if a nonreference drug filer receives anything of value, as defined, from another company asserting patent,” reads the bill.

It also states that it would provide "various exceptions to this prohibition, including, among others, if the agreement has directly generated procompetitive benefits and the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement.”

However, some legal experts believe that the newly signed bill is only going to add to the already troubling legal climate throughout the state.

“AB 824 makes it easier for private plaintiffs lawyers to bring lawsuits against pharmaceutical companies and makes it harder for those companies to defend legitimate settlements with generic companies,” said Kyla Christoffersen-Powell, president and CEO of the Civil Justice Association of California

“Unfortunately, because of AB 824’s passage, we can expect more lengthy and costly lawsuits to be filed over patent disputes. The longer patents are disputed in court, the longer it will take for less-expensive generic drugs to enter the market and be accessible to those in California who need a less-expensive drug alternative.”

The bill authorizes the California Attorney General to seek civil penalties within four years of any violations of the law. Other options would be available under California’s Cartwright Act, Unfair Practices Act or unfair competition laws.

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Organizations in this Story

California Attorney GeneralCivil Justice Association of CaliforniaCalifornia Governor's Office

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