California Law Combats ‘Pay-for-Delay’ Agreements

California Gov. Gavin Newsom has signed state legislation to combat “illegal, secretive deals between pharmaceutical companies in which one drug company pays its competitor to delay the competitor’s research, production, or sale of a competing version of its drug.” A news release from state attorney general Xavier Becerra says California’s is the first state law to take on so-called pay-for-delay agreements.

The law is to take effect 1/1/20 and would presume the agreements are anti-competitive and delay entry of the generic drug into the marketplace. It also limits the ability of drug companies to use attorney-client and common-interest legal privileges to withhold relevant evidence regarding the collusive agreements. The release says the bill “establishes a stronger platform to investigate and prosecute these illegal and harmful drug pricing practices.”