Aurobindo Efavirenz/Sustiva® Hatch Waxman Patent Suit Settled; Is It A "Pay For Delay" Deal?

Back in September 2013, we mentioned this patent suit involving BMS/Merck's Sustiva^® HIV drug, known as efavirenz, in its generic form. [Mylan's efavirenz version, I believe, is already on market in the EU, if memory serves. But it seems that almost four year old patent suit is still pending; I'll look into that, another day -- as time permits.] In the Aurobindo case, here in the US, the parties had agreed in principle to settle the suit as early as December 27, 2013 -- (before the court-imposed, but extended, deadline to file a formal answer to the Hatch-Waxman patent complaint -- which answer-at-law would have given others a virtual roadmap to the path/ability to sell the generic efavirenz here in the US, BTW!). . . and, now, as of a few nights ago -- the three parties have finally settled all claims and counterclaims between them. [I was waiting for the final order -- to discuss the below, hoping we'd get some actual terms disclosed. . . oh well.]

And so, the interesting question (apparently held in confidence by the settlement agreement) is whether this is a so-called "pay for delay" deal.

Unless this deal turns out to be material -- in the SEC's parlance -- to Merck (or BMS) -- in each case, not likely to be true -- we are not likely to ever know whether Aurobindo has agreed to delay (in return for a large payment from BMS/Merck) its launch of a generic efavirenz -- into or beyond 2017. At least not until that 2017 date comes and goes.

And so -- my object lesson here -- to most classically-schooled antitrust lawyers, that sort of an arrangement smells quite a bit like some Sherman Act §1, and Clayton Act §7 problems.

And as we have repeatedly noted, the feds are starting to aggressively make that claim -- at the FTC. Just search "pay for delay" as a term on this site's little box, upper left.

So, do stay tuned. Has the FTC asked to see the settlement agreement, unredacted? It plainly has the jurisdiction to do so. I'll pop the popcorn, here.