Regulatory Focus™ > News Articles > 2019 > 10 > New California Laws Set Sights on Pay-for-Delay Agreements, HIV Prevention

New California Laws Set Sights on Pay-for-Delay Agreements, HIV Prevention

Posted 09 October 2019 | By Zachary Brennan 

New California Laws Set Sights on Pay-for-Delay Agreements, HIV Prevention

California Gov. Gavin Newsom (D) on Monday signed into law one bill that aims to crack down on pay-for-delay deals that can block the launch of generic drug competition and one bill that will allow pharmacists, under specific circumstances, to distribute limited supplies of HIV drugs without prescriptions.

California’s new pay-for-delay law is the first in the nation directed at the deals between pharmaceutical companies in which one company pays a competitor to delay research, production or the sale of a competing drug. The California law mirrors work at the federal level to reduce such anti-competitive agreements, even as the Federal Trade Commission notes a declining number of such deals in recent years.

The generic drug industry group, known as the Association for Accessible Medicines (AAM), criticized the new law, explaining that it penalizes procompetitive deals that often enable generic drug market entry prior to patent expiration.

Chip Davis, president and CEO of AAM, said in a statement that the law will harm patients in California by denying them earlier access to affordable generics and biosimilars. He also said the law attempts to regulate federal patents and transactions that occur wholly in other states, which means it violates the Constitution.

“Because AB 824 seeks to prohibit the type of patent license that is contemplated under federal patent law, the portions of AB 824 relating to exclusive licenses should be invalidated,” AAM said in a letter in April to California legislators.

But Michael Carrier, distinguished professor of law at Rutgers Law School, told Focus that he disagreed with AAM’s objections to the new law.

“This is important. The Supreme Court in 2013 found that these settlements could violate the antitrust laws. But a presumption that a settlement involving payment and delayed entry is anticompetitive will help the CA AG [California Attorney General] bring a case (given that the settling parties disguise payment in increasingly complex ways),” Carrier said.

He also explained how the legislation “makes clear that entry before the end of the patent term is not necessarily procompetitive (consistent with the Supreme Court’s rejection of the ‘scope of the patent’ test).”

HIV Prevention

Meanwhile, another new California law would allow pharmacists to provide HIV prevention drugs under specific conditions. The law is similar to other state laws that allow pharmacists to dispense naloxone or the flu shot without a prescription, but there are also limitations to the California law and specific steps each pharmacist must take.

For instance, the pharmacist must undergo training, provide HIV testing to any prospective patients or ensure that testing has been done, notify the patient’s primary care provider of the postexposure prophylaxis treatment and maintain records of the treatment provided to each patient.

In addition, the pharmacist cannot provide more than a 60-day supply of preexposure prophylaxis to a single patient more than once every two years.

As far as whether FDA was involved with the creation of this bill, an agency spokesperson told Focus: "The FDA has not approved any anti-HIV drug for use without prescription. Truvada is approved as a prescription drug. Each state generally determines how prescriptions drugs are dispensed within the state."

Gilead, the manufacturer of Truvada, also told Focus in a statement, "As a matter of principle, Gilead supports policies that help to increase access to and expand awareness of PrEP. Among the key factors in successful implementation of HIV PrEP programs are finding healthcare professionals who are knowledgeable about PrEP and can facilitate linkage to PrEP care among populations at risk for HIV.
 
"Pharmacists have a long history of participation in the care of people living with HIV, and are increasingly involved in HIV prevention. The recently enacted law provides another option for people at-risk for HIV to access PrEP medication in California, particularly among vulnerable populations," the company said.

AB-824 Business: preserving access to affordable drugs

SB-159 HIV: preexposure and postexposure prophylaxis

Article updated on 10/8/19 with comment from FDA. And updated on 10/9/19 with comment from Gilead.

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