Supreme Court won’t review drug patent deal

The Supreme Court let stand a ruling that drug companies can pay rivals to delay production of generic drugs without violating federal antitrust laws.

The justices refused to review a federal appeals court ruling that upheld the dismissal of a legal challenge to a deal between Bayer AG and Teva Pharmaceutical Industries Ltd’s Barr Laboratories. Bayer paid Barr to prevent it from bringing to market a version of the antibiotic drug Cipro.

The deal, involving Bayer’s 1997 settlement of patent litigation with Barr, was challenged by a number of pharmacies, which appealed to the Supreme Court. More than 30 states and various consumer groups supported the appeal.

The Federal Trade Commission has opposed such deals, saying they violate antitrust law and cost consumers an estimated $3.5 billion a year in higher prescription drug prices. It has supported legislation pending in Congress to prohibit such settlements, which it says have increased in recent years.

The New York-based appeals court, in its ruling last year, cited its similar 2005 decision involving the drug Tamoxifen, used to treat breast cancer, infertility and other conditions. The Supreme Court declined to review that case.

In the Cipro case, the Supreme Court rejected the appeal by the pharmacies without comment.

The Supreme Court case is Louisiana Wholesale Drug Co v. Bayer AG, No. 10-762.

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(Reuters)