Cashing Out: How Big Pharma Continues to Capitalize on the Antitrust Loophole Created in FTC v. Actavis

December 23, 2016

The drug industry is one of the most lucrative in the United States. Drug manufacturers routinely find themselves thrust into patent infringement litigation against generic manufacturers who are motivated by high potential returns from the marketplace. In lieu of expensive and time-consuming litigation, brand and generic manufacturers will often enter into settlement agreements; however, these agreements are frequently wrought with anticompetitive effects−commonly known in the industry as “reverse payment settlements.” In 2013, the Supreme Court was asked to determine if reverse payment settlements were violations of antitrust law, but it only addressed one type of settlement, opening the door for continued antitrust violations and lower court confusion. This Recent Development will examine the different forms of reverse-payment settlements, the Supreme Court’s silence, and why this issue continues to plague circuit courts around the nation.