Third Circuit Antitrust Decision Makes Pharmaceutical Patent Disputes Nearly Impossible to Settle

Posted by Forbes

Third Circuit Antitrust Decision Makes Pharmaceutical Patent Disputes Nearly Impossible to Settle

By Rich Samp

The US Supreme Court’s 2013 FTC v. Actavis, decision held that “reverse payment” settlement agreements—in which a drug company suing a generic competitor for patent infringement pays the alleged infringer a substantial amount of cash to settle the litigation—are subject to antitrust scrutiny. The Court reasoned that such reverse payments are unusual and may indicate that the generic company is really being paid not to compete.

An August 21, 2017 decision from the US Court of Appeals for the Third Circuit has stretched the Actavis holding far beyond anything intended by the Supreme Court. If the appeals court’s decision in In re: Lipitor Antitrust Litigation is allowed to stand, it may become virtually impossible for drug companies to settle patent-infringement litigation.

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