Actavis and 'Large and Unjustified' Payments
5 Pages Posted: 30 Jul 2013
Date Written: July 28, 2013
This short piece responds to Alan Morrison’s post on SCOTUSblog that the Supreme Court’s Actavis decision is unclear because of its emphasis on “large and unjustified” payments.
The piece first explains that the payments at issue in "reverse payment" cases are, by definition, likely to be large since payments less than the average $5 to $10 million in litigation costs will typically not present antitrust concern. And above this level, the analysis boils down to whether the payment is justified. This question will often be easier than it first appears when (as the facts of the Actavis case itself reveal) the brand has no legitimate interest in the generics’ services.
The piece then discusses the likelihood of settlements without reverse payments. And it concludes by discussing two congressional bills that could provide additional assistance: S.214 (which creates a standard of presumptive illegality in cases brought by the Federal Trade Commission) and S.504 (which expands the 180-day exclusivity period reserved for the first-filing generic to later generics that win court decisions finding the patent to be invalid or not infringed).
Keywords: patent, antitrust, settlement, drugs, pharmaceuticals, Hatch Waxman, reverse payments, pay for delay
JEL Classification: I18, K21, L40, L41, L43, L65, O34, O38
Suggested Citation: Suggested Citation