The US Supreme Court holds that “reverse payment” patent settlements between brand-name drug manufacturers and would-be generic competitors should be reviewed under the antitrust rule of reason (Actavis)

On Monday, June 17, the Supreme Court handed down a decision in FTC v. Actavis, Inc., bringing some clarity to the antitrust treatment of so-called reverse payment patent settlements between brand-name drug manufacturers and would-be generic competitors, but leaving many open questions as well [1]. In an opinion written by Justice Breyer, the Court reversed the Eleventh Circuit’s decision by a vote of 5-3 and rejected both the respondents’ proposed “scope of the patent” test that had immunized most settlements from antitrust challenge and the “presumptively unlawful” standard endorsed by the FTC [2]. The Court instead opted for a rule of reason analysis, leaving it to the lower courts to sort out the specifics. The decision is unlikely to reduce the number of investigations or lawsuits

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Authors

  • Arnold & Porter Kaye Scholer (Brussels)
  • Latham & Watkins (San Francisco)
  • Arnold & Porter Kaye Scholer (Washington)
  • American Urological Association and Urology Care Foundation

Quotation

Tim Frazer, Kelly Smith Fayne, Jonathan Gleklen, Diane Bieri, The US Supreme Court holds that “reverse payment” patent settlements between brand-name drug manufacturers and would-be generic competitors should be reviewed under the antitrust rule of reason (Actavis), 17 June 2013, e-Competitions Bulletin June 2013, Art. N° 52994

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