2008 and 2015: Night and Day for Drug Patent Settlements

CPI Antitrust Chronicle, Dec. 2015

8 Pages Posted: 16 Dec 2015

Date Written: December 14, 2015

Abstract

A lot changed between 2008 and 2015. Lindsay McSweeney's stewardship cemented the importance of CPI Antitrust Chronicle. Standard-essential patents, the smartphone patent wars, and patent trolls thrust themselves onto the IP/antitrust scene. But perhaps the most significant change is the complete reversal of fortune undergone by drug patent settlements.

Settlements by which brand-name drug companies pay generic firms to delay entering the market threaten severe anticompetitive harm. This short article portrays two vastly different treatments of this behavior.

In 2008, the appellate courts were putting the finishing touches on their framework of near-complete deference to the settlements based on a "scope of the patent" test.

But by 2015, courts have been busily hashing out a framework to apply rigorous antitrust analysis to the agreements. I focus on three developments: (1) the Third Circuit's Lamictal decision, (2) the California Supreme Court's Cipro ruling, and (3) the FTC's $1.2 billion settlement with Cepahlon.

One can hope that seven years from now, in 2022, the Chronicle will be going stronger than ever and, to the extent brands and generics are still entering into reverse-payment settlements, courts are still rigorously enforcing the antitrust laws.

Keywords: patent, antitrust, drugs, pharmaceuticals, settlement, scope-of-patent, Actavis, Lamictal, Cipro, Cephalon, FTC, reverse payments, exclusion payments

JEL Classification: I18, K21, L40, L41, L43, L65, O34, O38

Suggested Citation

Carrier, Michael A., 2008 and 2015: Night and Day for Drug Patent Settlements (December 14, 2015). CPI Antitrust Chronicle, Dec. 2015. Available at SSRN: https://ssrn.com/abstract=2703609

Michael A. Carrier (Contact Author)

Rutgers Law School ( email )

217 North Fifth Street
Camden, NJ 08102-1203
United States
856-225-6380 (Phone)
856-225-6516 (Fax)

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