California Assembly Bill 824 (AB 824) creates a framework for California courts to treat pay-for-delay agreements as presumptively unlawful under the Cartwright Act. AAI has long advocated for a similar approach under both state and federal law in numerous amicus filings in courts throughout the United States.
In November, the Association for Accessible Medicines (AAM), a trade association that represents the interests of generic pharmaceutical manufacturers, filed a motion for a preliminary injunction against California Attorney General Xavier Becerra, seeking to bar the state from implementing or enforcing AB 824. Among other things, AAM argues that AB 824 will prevent procompetitive patent litigation settlements, leading to fewer generic challenges to branded pharmaceuticals, higher drug prices, and diminished public health. AAI filed an amicus brief in district court countering AAM’s arguments.
On New Year’s Eve, the district court denied AAM’s motion and later denied a subsequent motion for an injunction pending appeal. On appeal to the Ninth Circuit, AAM makes arguments similar to those it made below.
AAI’s Ninth Circuit brief, which was joined by Consumer Reports and Public Citizen, counters by explaining the severity of the harm caused by payments to exclude generic competition, and why AB 824 is an appropriate and beneficial outgrowth of the logic underlying the Supreme Court’s watershed decision in FTC v. Actavis and the California Supreme Court’s decision in In re Cipro Cases I & II. Among other things, the brief explains that the public interest does not support an unfettered right for litigants to reach anticompetitive settlements, why AAM’s arguments are wrong on the merits, and why similar arguments were appropriately rejected by the Supreme Court in Actavis.
The brief was written by Hilliard & Shadowen Partner Rick Brunell, with assistance from AAI Vice President of Legal Advocacy Randy Stutz.