California Bill Would Impose First State Ban on Pay-For-Delay Deals

February 27, 2019

A bill introduced in the California legislature and endorsed by the state’s attorney general would ban controversial “pay-for-delay” deals between branded and generic drugmakers.

If the bill passes, California would become the first state to ban pay-for-delay deals. AB 824, introduced by Jim Wood (D-2nd District), would ban any agreement in which a drugmaker transfers anything of value to stall research, marketing or sale of a competitor’s drug.

The bill would treat such agreements as inherently anticompetitive and bar all involved parties from withholding evidence regarding such arrangements.

“When drug companies use these quiet pay-for-delay agreements with generic drug manufacturers it hurts consumers twice — once by delaying the introduction of an equivalent generic drug that is almost always cheaper than the brand name and again by stifling additional competition when multiple generic companies begin producing even less expensive generic equivalents,” Wood said.

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