Federal Trade Commission Suffers Another Setback in Its Campaign to End Pharmaceutical Reverse-Settlement Agreements

William Michael, Aidan Synnott, Jun 27, 2012

For over a decade, the Federal Trade Commission has sought, with little success, to end “reverse settlement” payments among manufacturers of branded and generic pharmaceuticals. On April 25, 2012, the Eleventh Circuit Court of Appeals dealt another blow to the FTC’s campaign against reverse settlements.

In Federal Trade Commission v. Watson Pharmaceuticals, the Court affirmed the dismissal of a complaint alleging that a reverse settlement payment, made by the holder of a pharmaceutical patent to two generic drug manufacturers, violated the antitrust laws. The decision renders reverse settlements “immune from antitrust attack” in the Eleventh Circuit in most circumstances, and further diminishes the FTC’s chances of persuading other courts to adopt its policy position.

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