A Response to Chief Justice Roberts: Why Antitrust Must Play a Role in the Analysis of Drug Patent Settlements
10 Pages Posted: 22 Sep 2013 Last revised: 8 Mar 2014
Date Written: September 21, 2013
The Supreme Court’s decision in FTC v. Actavis has justly received widespread attention for its antitrust analysis of settlements by which brand-name drug companies pay generics to delay entering the market. Much of the attention has focused on the application of the Court’s standard and the logistics of applying its rule-of-reason analysis to “reverse payment” settlements.
One overlooked issue, however, has been the position of Chief Justice Roberts in dissent that the antitrust analysis of these settlements must assume that the patent at issue is invalid or not infringed, since this is a problem of patent, not antitrust, law.
This symposium essay critiques Roberts’ position. It explains that this position (1) shortchanges patent law, which includes a policy goal of testing invalid patents to make sure they do not block competition; (2) downplays antitrust law’s role in monitoring behavior that can resemble market division between potential competitors; (3) and ignores the Hatch-Waxman Act’s encouragement of challenges to patents that are invalid and not infringed. In a nutshell, the appropriate antitrust treatment of reverse-payment settlements is more nuanced than the version presented by Roberts.
Keywords: patent, antitrust, settlement, drugs, pharmaceuticals, Hatch Waxman, reverse payments
JEL Classification: I18, K21, L40, L41, L43, L65, O34, O38
Suggested Citation: Suggested Citation