Supreme Court: Pharmaceutical Reverse Payments May be Considered by Supreme Court

In an order today, the Supreme Court asked the US Solicitor General for the Gov’ts views on Joblove v. Barr Labs.  This case, also known as Tamoxifen Citrate Antitrust Litigation, questions the antitrust viability of reverse-payment settlements

Pharmaceutical patent owners and generic makers have been accused of cooperating in a scheme to prop-up drug prices.  In a number of cases, generic manufacturers have received payments from patent owners as incentive to drop patent challenges. So far the courts have OK’d the agreements, but the Government is pushing its case for enforcement of the Antitrust laws.

Over the past few years, the FTC & DOJ have been at-odds on whether this business practice represents a problem.

In 2006, FTC v. Schering-Plough, a similar case was presented to the Supreme Court. There, the DOJ filed a brief indicating its disagreement with the FTC and arguing that the high court should not hear the case. In its brief, the DOJ indicated that the Tamoxifen litigation (this case) would be a better avenue for the Supreme Court’s focus.  After hearring the DOJ’s argument, the Supreme Court denied cert in Schering-Plough.

10 thoughts on “Supreme Court: Pharmaceutical Reverse Payments May be Considered by Supreme Court

  1. 10

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  2. 8

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  3. 7

    These deals are between the branded drug maker and the generic maker that holds the 180-day exclusivity period. If Congress wants market forces to come into play, the law should provide for surrender of the 180-day exclusivity whenever a reverse-payment agreement is entered into. The next generic maker in line then gets the exclusivity, and can either use it, or enter into their own reverse-payment arrangement and surrender it to whoever is next in line.

  4. 6

    This issue is of interest to me as I am following the fortunes of Teva (world’s largest generic manufacturer, but also with branded drugs such as Copaxone etc.) and Unipharm – another Israeli company with a stable of 20-30 or so so-called branded generics… i.e. their generic drugs are well known in thierr own right.

    Can anyone tell me which firms have been involved, with reference to court rulings, newspaper ads, etc.


  5. 5

    Every settlement is a bribe: One party gives the other some money or a cross-license and the other promises to go away, forever. The only difference with these settlements is that they implicate the broader market, instead of simply the parties to the dispute.
    I think these settlements are fine. If these settlements do in fact have no other purpose than to “prop-up” pharmaceutical costs to consumers, you would think our free market would normalize this practice and we would see a flood of genrics file udner 505(b) of Hatch-Waxman. Then, the generics would sue brand names for invalidty or unenforceability of the patent underlying the brand name drug, only to gladly “go away” and refuse to market the generic once it receives a favorable settlement.
    Regulations with respect to safety and efficacy are great; but not so much when dealing with sophisticated companies. As long as there are genuine purposes to these settlements (i.e. release of invalidty assertions with prejudice), than any secondary effects such as prices akin to a prolonged patent life is how the cookie crumbles.

  6. 3

    After the high Court failed to grant a cert to hear the FTC v. Schering-Plough Case, the 110th Congress proposed the “Preserve Access to Affordable Generics Act”.

    This Act was proposed on January 17, 2007 to allegedly enhance competition in the pharmaceutical market, a rather flawed judgment, in my opinion. By enacting such an amendment to the Hatch-Waxman Act not only does the Congress undermine the strength and viability of pharmaceutical patents but also makes it more difficult for parties to come into settlements.

    Now, the race is on for the high Court to remedy its failure in the Schering-Plough case, and establish a uniform approach to the reverse payment patent settlements before the Congress enacts its own version of the law.

  7. 2

    In response to Peter’s question, marine law has the concept of the agony of collision i.e. the interval of time between when it becomes inevitable that a collision will happen and the time when the collision takes place.

    In KSR we are still in that period – and perhaps we should not be too enthusiastic for the period to end.

  8. 1

    Yes, but does anybody have any information on precisely WHEN the KSR decision is likely to be released?

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