Consumers Ask California Appellate Court to Reconsider Cipro Anticompetitive Reverse Payment Agreements

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) May 20, 2010 -- Cipro users forced to overpay for medications because Bayer and Barr Laboratories agreed to keep generic equivalent from marketplace, filing states

SAN DIEGO – Attorneys representing plaintiffs who overpaid for the antibiotic Cipro are asking a California appellate court to reverse a lower court ruling that set aside antitrust claims against Bayer Corporation. The case involves the agreement Bayer made with generic competitors to prevent competition and to maintain Cipro prices at high levels. The plaintiffs are a certified class of California consumers, union health and welfare funds, and others.

In their brief, filed late last week with the California Court of Appeal for the Fourth Appellate District in San Diego, the attorneys ask the Court to allow a jury to determine whether a patent holder violates California antitrust laws by paying its generic competitors hundreds of millions of dollars not to compete.

That’s what happened between 1997 and 2004 when Bayer, with U.S. headquarters in Pittsburgh, Pa., signed an exclusionary reverse payment agreement with Montvale, N.J.-based Barr Laboratories, under which Barr agreed not to produce its generic version of Cipro. In exchange, Bayer paid Barr and other generic drug manufacturers $398.1 million, preserving Cipro as the only choice for consumers and thereby maintaining, even increasing, its cost.

While the patent on Cipro expired in 2004, attorneys representing consumers and third-party payers argue that those groups paid far more for the drug than they should have. They’re asking the California appellate court to set aside a summary judgment granted by a lower court in Bayer’s and Barr’s favor last year.

In that ruling, California Superior Court Judge Richard E.L. Strauss adopted the standard set forth in a decision by the U.S. Court of Appeals for the 2nd Circuit in a reverse payment case involving the drug Tamoxifen. However, a panel of judges ruling in a separate Cipro case at the 2nd Circuit recently identified “compelling reasons” to reconsider the Tamoxifen case, and went so far as to invite the Cipro plaintiffs to petition for a hearing of the entire court to address “the important interests identified.”

In addition, the Obama Administration; members of Congress; the Federal Trade Commission; the Department of Justice, state attorneys general, including the Attorney General of California; public interest groups; scholars and medical professionals are on record saying these exclusionary reverse payment agreements are wrong.

“The whole point of having generic drugs is to lower health care costs, including the money consumers pay for badly needed medications,” says attorney Dan Drachler of Zwerling, Schachter & Zwerling, LLP, who represents the plaintiffs along with attorney Joseph Saveri of Lieff Cabraser Heimann & Bernstein, LLP. “The agreements between Bayer and the other companies avoided the law, kept prices high and protected unreasonable profits for the dru