UPDATE 1-US court upholds Bayer, Barr deal over Cipro

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WASHINGTON, Oct 15 (Reuters) - A U.S. appeals court backed a lower court decision allowing a Bayer AG (BAYG.DE) agreement that paid Barr Pharmaceuticals BRL.N to delay producing a generic version of the antibiotic drug Cipro.

The U.S. Court of Appeals for the Federal Circuit affirmed the ruling by the U.S. District Court for the Eastern District of New York.

The suit had been filed by purchasers of Cipro and advocacy groups like Local 1199 National Benefit Fund for Health and Human Services Employees.

The Federal Trade Commission considers agreements that delay the availability of cheaper generic versions of drugs a violation of antitrust law, but the courts have split on whether they are legal. Sen. Barack Obama, the Illinois Democrat running for president, is among 10 sponsors of U.S. Senate legislation to bar such arrangements.

Neither the Senate bill to ban the deals, nor its companion in the U.S. House of Representatives, has made much headway, facing opposition from pharmaceutical companies and makers of generic medicines.

Generics can be 20 percent to 90 percent cheaper than brand-name drugs. (Reporting by Diane Bartz; Editing by Tim Dobbyn)