Drug Makers’ Settlements Get Supreme Court Review

The Supreme Court will take a close look at payments from brand-name drug makers to manufacturers of generic equivalents to keep the no-name products off the market at an estimated cost of $3.5 billion a year to consumers.

The justices said Friday they will consider competing appeals court decisions about whether the practice known as reverse payments or “pay for delay” illegally reduces competition by delaying the sale of substantially cheaper generic drugs.

The payments typically are made to resolve patent infringement claims by the brand-name manufacturers against the makers of the generic drugs. What is unusual about the practice is that the claim is resolved by a payment from the company that holds the patent rights to the company accused of violating them.
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