Calif. Becomes 1st State To Target 'Pay-For-Delay' Drug Deals

Law360 (October 8, 2019, 3:59 PM EDT) -- California is set to become the first state in the nation to prevent pharmaceutical companies from making deals that keep cheaper generic drugs off the market, after Gov. Gavin Newsom signed a bill Monday outlawing pay-for-delay agreements.

The bill takes aim at a common practice in the pharmaceutical industry in which the maker of a branded drug pays another company to delay introduction of a generic competitor. These deals cost maintain higher drug prices and cost consumers $3.5 billion every year, according to a Federal Trade Commission study.

“California will use our market power and our moral power to take on...

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