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Source: US State of California Department of Justice

Friday, October 16, 2020

Contact: (916) 210-6000, agpressoffice@doj.ca.gov

AB 824 protects Californians from a collusive pharmaceutical company strategy to raise drug prices and limit options for patients

SACRAMENTO — California Attorney General Xavier Becerra yesterday filed a brief opposing the Association for Accessible Medicine’s (AAM) latest attempt to challenge Assembly Bill 824 (AB 824), the California law that tackles illegal, anticompetitive deals between pharmaceutical companies known as pay-for-delay agreements. These so-called “pay for delay agreements” happen when a brand name drug maker enters an agreement and pays money to a generic company to keep them off the market. This results in fewer choices for patients and higher costs. AAM, a group of generic drug manufacturers, is seeking another preliminary injunction in its second lawsuit challenging the legislation. In July, the U.S. Court of Appeals for the Ninth Circuit ruled in the Attorney General’s favor, rejecting AAM’s initial challenge of AB 824 and preliminary injunction request.

“Californians shouldn’t have to pay extra to pad the profits of pharmaceutical companies,” said Attorney General Becerra. “Our state’s anti-pay-for-delay law helps protect families from paying outrageous prices for life-saving medication. AAM already challenged this law before and lost in court. We believe we will be successful against them again.”

AB 824 went into effect on January 1, 2020, and became the first law in the country to combat illegal, secretive pay-for-delay agreements. In a pay-for-delay agreement, one drug company pays its competition to delay the research, production, or sale of a competing version of its drug. As a result, pay-for-delay agreements stifle competition and allow pharmaceutical companies to raise the price of medications to often exorbitant amounts, leaving patients with few options and in many cases, the inability to afford their prescriptions.

In the brief, Attorney General Becerra argues that as in its previous attempt, AAM does not have standing to challenge AB 824. The Attorney General also argues that AAM’s motion for preliminary injunction should be denied because: 

  • AAM is not likely to succeed on the merits;
  • AAM has not demonstrated imminent and irreparable harm; and
  • Enjoining AB 824 would not be in the public interest.

Attorney General Becerra continues to fight to lower the cost of prescription drugs by keeping California markets fair, open and competitive. On Tuesday, he joined a coalition of 20 state attorneys general in filing an amicus brief addressing pay-for-delay agreements involving AbbVie Inc.’s drug, Humira. In July 2019, the Attorney General announced four settlement agreements totaling nearly $70 million against pharmaceutical companies for entering into pay-for-delay agreements.

A copy of the brief is available here.

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