Markets Wired

Federal Trade Commission Chairwoman Edith Ramirez issued the following statement regarding today’s decision by the U.S. Supreme Court in FTC v. Actavis, Inc., which held that pay-for-delay agreements between brand and generic drug companies are subject to antitrust scrutiny.

“The Supreme Court’s decision is a significant victory for American consumers, American taxpayers, and free markets.  The Court has made it clear that pay-for-delay agreements between brand and generic drug companies are subject to antitrust scrutiny, and it has rejected the attempt by branded and generic companies to effectively immunize these agreements from the antitrust laws.  With this finding, the Court has taken a big step toward addressing a problem that has cost Americans $3.5 billion a year in higher drug prices.”

“We look forward to moving ahead with the Actavis litigation and showing that the settlements violate antitrust law. We also are studying the Court’s decision and assessing how best to protect consumers’ interests in other pay for delay cases.  Fighting anticompetitive patent settlements has been a priority for the Commission beginning under the Chairmanships of Robert Pitofsky, through Timothy J. Muris, Deborah Platt Majoras, William E. Kovacic, and culminating under the leadership of Chairman Jon Leibowitz.”

The Court’s decision stems from the FTC’s appeal of a ruling by the U.S. Court of Appeals for the Eleventh Circuit, which had dismissed the agency’s challenge to an alleged pay-for-delay agreement involving the testosterone-replacement drug AndroGel.  Several courts, including the Eleventh Circuit, have found that these agreements were insulated from antitrust scrutiny.  However, in July 2012, the Court of Appeals for the Third Circuit held that a reverse payment from a branded drug manufacturer to a generic competitor was presumptively unlawful, creating a split in the circuits and prompting the Supreme Court review.