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US: Lipitor pay-for-delay case on appeal

 |  January 7, 2016

In In re Lipitor Antitrust Litigation, Judge Sheridan (District of New Jersey) found that the notion of “payment” in drug patent settlements extends beyond cash transfers to include non-cash conveyances. But the court required such a conveyance to be “converted to a reliable estimate of its monetary value” and ruled that non-cash deals should clear a heightened plausibility standard. The court also introduced a new test that was based on the False Claims Act and that significantly raised the bar facing plaintiffs.

In a brief filed last week on behalf of 48 professors and the American Antitrust Institute, Professor Michael Carrier and Steve Shadowen call on the Third Circuit to reverse this decision. They contend that the opinion undermines the Supreme Court’s ruling in FTC v. Actavis, the Third Circuit’s Lamictal decision, and pleading requirements articulated in Supreme Court and Third Circuit precedents. The brief also highlights allegations that typically survive a motion to dismiss, most notably the brand firm’s forgiveness of hundreds of millions of dollars facing the generic in separate litigation.

The Third Circuit will consider this case together with an earlier-filed appeal in the In re Effexor case, which also involved heightened pleading standards, in this case applied to a “no-authorized-generic” promise by which a brand promises not to introduce its own generic that would compete with the “true” generic.

Full content attached: Lipitor amicus brief 48 profs AAI

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