9th Circuit Rejects Challenge to California Pay-For-Delay Law

In a July 24, 2020 decision, the Ninth Circuit instructed the district court to dismiss without prejudice claims by a generic-drug industry association challenging a California statute prohibiting pay-for-delay agreements. 

The case came to the panel on interlocutory appeal after a California federal judge rejected the Association for Accessible Medicines’ (AAM) bid for a preliminary injunction that would block implementation of A.B. 824, which the governor signed into law in October last year.  The panel agreed with the district court and found that AAM had not satisfied the requirements of standing because it had not shown that there is a “substantial risk” that the law will cause any of its members to suffer injury that is concrete, particularized, and imminent.  “At most, AAM’s members state that they are engaged in patent infringement lawsuits involving pharmaceutical products and that they historically have settled such lawsuits, but they do not allege that they intend to enter into settlement agreements of the sort prohibited by A.B. 824,” the panel said.

Under the California law, any reverse payment patent settlements associated with Hatch-Waxman Act pharmaceutical litigation — or pay-for-delay settlements — where a generic-drug maker accepts anything of value or agrees not to compete for a period of time will be presumed to have anticompetitive effects.