8 Pages Posted: 30 Aug 2013 Last revised: 30 Dec 2013
Date Written: August 26, 2013
In Federal Trade Commission v. Actavis, Inc., the Supreme Court provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. The Court came down strongly in favor of an antitrust solution to the problem, concluding that “an antitrust action is likely to prove more feasible administratively than the Eleventh Circuit believed.” At the same time, Justice Breyer’s majority opinion acknowledged that the Court did not answer every relevant question. The opinion closed by “leav[ing] to the lower courts the structuring of the present rule-of-reason antitrust litigation.”
This article is an effort to help courts and counsel fill in the gaps. We identify and operationalize the essential features of the Court’s analysis. We describe the elements of a plaintiff’s affirmative case, justifications that are ruled out by the Court's logic, and a test for viable justifications. For private cases, we outline an appropriate procedure for evaluating damages and suggest specific jury instructions.
Keywords: antitrust, drugs, FTC, Hatch-Waxman, innovation, patent, Paragraph IV, pay for delay, pharmaceuticals, regulation, reverse payment, settlement
JEL Classification: K21, L40, L41, L50
Suggested Citation: Suggested Citation
Edlin, Aaron S. and Hemphill, C. Scott and Hovenkamp, Herbert J. and Shapiro, Carl, Activating Actavis (August 26, 2013). Antitrust Magazine, Fall 2013, at 16; Columbia Law and Economics Working Paper No. 457. Available at SSRN: https://ssrn.com/abstract=2317241 or http://dx.doi.org/10.2139/ssrn.2317241