Bayer antitrust class action settlement approved

Posted on: November 22nd, 2013 by Steve Larson

Antitrust CasesA California superior court judge on Friday approved a $74 million settlement between Bayer Corp. and consumers of its widely used antibiotic Cipro.  The settlement releases Bayer from an antitrust class action over payments it made to generic-drug manufacturers to keep their versions of the medication off the market.

Judge Ronald L. Styn, sitting in San Diego County, also signed off on the $24.6 million in fees and $2.5 million in litigation costs requested by the plaintiffs’ attorneys, as part of the first settlement of a pay-for-delay case to become public after the U.S. Supreme Court decided drug manufacturers could face liability for paying off competitors.

The class action over Cipro, which has gone to California’s Supreme Court, will continue moving forward against generics makers that allegedly took payments from Bayer, such as Teva Pharmaceutical Industries Ltd. and Watson Pharmaceuticals, Inc.

The settlement resolved Bayer’s part in a long-running antitrust suit over the nearly $400 million the company paid out in 1997 to put an end to generic-drug challenges to the Cipro patent. The plaintiffs’ case against Barr Pharmaceuticals Inc. — purchased by Teva for $7.46 billion in 2008 —  and several other generics companies will continue in the state high court, which is weighing whether the Hatch-Waxman Act settlements can be challenged under California’s antitrust law.

Cipro is among Bayer’s best-selling pharmaceutical products, with worldwide sales for Cipro and Ciprobay of $303 million in 2011, according to the company’s annual reports.

Bayer and the purchasers in May agreed on the basic outline of the settlement over the payments to the generics companies, with the uncertainty of both the U.S. Supreme Court’s potential findings in Federal Trade Commission v. Actavis and their own California Supreme Court case looming over them.

The parties asked the trial court to approve the deal back in July, after on-and-off negotiations picked up steam once the high court heard oral arguments in Actavis and gave some indication that it would allow pay-for-delay litigation to continue.

The justices ruled that, while payments by brand-name drugmakers to generics manufacturers were not presumptively illegal, they could be challenged in court.