Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Wednesday, July 4, 2012

Federal Trade Commission Rejected in “Reverse Payment” Suit

Posted by D. Daniel Sokol

Kevin E. Noonan (McDonnell Boehnen Hulbert & Berghoff) has written on Federal Trade Commission Rejected in “Reverse Payment” Suit.

ABSTRACT: The Federal Trade Commission in recent years has identified a practice it considers to be a threat to consumers regarding generic drugs. This threat is posed by the practice of "reverse payments" in ANDA litigation. Typically, in these arrangements a branded drug manufacturer settles litigation with a generic challenger brought under the Hatch-Waxman Act and such settlements often involve a payment from the branded to the generic drug maker. In the FTC's view, such payments should be illegal as anticompetitive market behavior amounting to a restraint on trade and a violation of the antitrust laws. However, despite judicial, legislative, and administrative attempts to ban the practice, neither Congress nor the courts have been willing to do so. While a ban on what the FTC characterizes as "pay for delay" practices have been a part of the Obama administration's budgets for the past few years, nothing has come of it.

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