Supreme Court Rules in Reverse Payment Case

Kevin Noonan, Sep 30, 2013

In June, the Supreme Court ruled 5-3 in favor of the Federal Trade Commission in FTC v. Actavis, Inc. Writing for the majority (that included Justices Kennedy, Ginsburg, Sotomayor, and Kagan), Justice Breyer’s opinion reversed the decision of the Eleventh Circuit Court of Appeals dismissing the FTC’s complaint that a “reverse payment” settlement agreement between an innovator drug maker and generic challengers in ANDA litigation was anticompetitive and violated the antitrust laws.

The decision was not a decisive victory for the Commission, however: The Court refused to accept the FTC’s position that such agreements are presumptively unlawful, holding that lower courts should apply an antitrust “rule of reason” analysis when evaluating such agreements.

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