(Reuters) - California’s highest court has revived an antitrust class action accusing a drugmaker since acquired by Teva Pharmaceutical Industries Ltd of keeping a generic version of Bayer AG’s antibiotic Cipro off the market in exchange for payment.
The unanimous opinion, written by Justice Kathryn Werdegar, marks the first time an appellate court has tackled so-called “pay for delay” deals since a landmark 2013 decision by the U.S. Supreme Court holding that such deals may be illegal. Bayer was originally a defendant in the case, but settled in 2013.
The case, which began in 2000 in California state court, centers on a series of settlements in the late 1990s under which Bayer allegedly paid Barr Pharmaceuticals, since bought by Teva, $398 million not to market a generic version of Cipro. Bayer had earlier sued Barr claiming that generic Cipro would infringe a Bayer patent.
The plaintiffs in the antitrust class action - a group of non-profits and individuals in California who bought Cipro - claimed that the settlement violated California’s antitrust law, the Cartwright Act, and drove up the price of Cipro.
In 2009, the California state court dismissed the case, and in 2011, a state appellate court upheld that ruling. In 2012, the state’s Supreme Court agreed to hear the plaintiff’s appeal.
In 2013, while the appeal was pending in California, the U.S. Supreme Court ruled in another case, FTC v. Actavis, that settlements in which a brand-name drug maker pays generic drugmaker to stay off the market may be anticompetitive. Howeber, the court did not issue any firm rule about when such settlements are anticompetitive, leaving that to lower courts.
The case is In re Cipro Cases I & II, Supreme Court of the State of California, No. S198616.