Recent years have seen a significant number of antitrust challenges to so-called “reverse payment” pharmaceutical patent litigation settlements between brand name manufacturers and their generic competitors. The Supreme Court’s decision in FTC v. Actavis resolved a split among the courts of appeal, and held that settlements in which “large and unjustified” reverse payments are made are subject to antitrust scrutiny in the form of a traditional “rule of reason” analysis. In the wake of Actavis, the lower courts have begun to grapple with the question of what, if any, application Actavis has to the disposition of antitrust challenges to patent settlements that do not include a large payment of cash by the brand producer to the generic, but may include other forms of non-monetary consideration.
The battle between the pharmaceutical industry and the Federal Trade Commission (“FTC”) over so-called “pay-for-delay” settlements will finally be examined and decided by the Supreme Court. Last Friday, the Court granted certiorari in Federal Trade Commission v. Watson Pharmaceuticals, Inc., one of two cases with filed certiorari petitions involving Hatch Waxman reverse payment settlements. The petition in the other case, In re K-Dur Antitrust Litigation, is still pending.