WASHINGTON (CN) – Bayer AG did not violate antitrust laws by paying generic drug manufacturers more than $398 million to settle patent disputes over the antibacterial drug Cipro.
Pharmacies and advocacy groups claimed Bayer eliminated competition by entering into a restrictive settlement agreement with Barr Laboratories. To stop Barr from making a generic version of Cipro, Bayer allegedly sued Barr for patent infringement in order to force a settlement that would let Bayer keep its monopoly on Cipro.
Barr agreed to stop pursuing a generic version of ciprofloxacin hydrochloride, the active ingredient in Cipro, in exchange for a $49.1 million payment. Bayer also agreed to supply Barr with Cipro for resale or make quarterly payments until Dec. 31, 2003. The payments, added to the $49.1 million, totaled $398.1 million.
The plaintiffs said Bayer violated antitrust and consumer protection laws through patent fraud and sham litigation.
The district court found no evidence that the agreements stopped others from challenging the patents or restrained trade outside the “exclusionary zone” of the patent.
The appellate court agreed, concluding that any anticompetitive effects of the agreements fell within the power of the patent.
The judges also noted that Bayer has since sued four other generic drug makers and has faced other patent invalidity claims, an indication that the agreements did not prevent any companies from challenging Bayer’s patent.