Analysis Group Antitrust Experts File Amicus Curiae Brief Regarding Reverse Payment Settlements

March 05, 2013

A group of prominent antitrust economists and consultants, including several Analysis Group professionals and academic affiliates, on February 28, 2013, filed an amicus curiae -- or friend of the court -- brief with the U.S. Supreme Court in regard to Federal Trade Commission v. Actavis Inc. et al. At issue in this matter is whether so-called "reverse payment" settlements between manufacturers of branded and generic pharmaceuticals are per se lawful if they are within the scope of the patent, or if such deals should be presumptively anticompetitive and unlawful as claimed by the petitioner. The antitrust experts filed the brief in support of the respondents. The group's filing was noted in the Law360 article, "Supreme Court Warned of Risks of Banning Pay-for-Delay" (March 1, 2013).

Among the signatories are Analysis Group Chairman Bruce Stangle, Managing Principals Pierre Cremieux and Paul Greenberg, and academic affiliates Professor Henry Grabowski, from Duke University; Professor R. Glenn Hubbard, dean of Columbia Business School; Professor James Hughes, from Bates College; and Professor Edward Snyder, dean of Yale School of Management. The brief was submitted by attorneys from Patterson Belknap Webb & Tyler LLP and Ballard Spahr LLP.

The authors of the amicus brief argue that the available economic evidence does not support the Federal Trade Commission's (FTC) effort "to impose a standard of presumptive illegality on certain forms of patent settlements." Among the procompetitive arguments they cite are existing provisions in the Hatch-Waxman Act that maintain a careful balance between consumers' access to generic drugs and the industry's continued efforts to innovate. "Through existing regulations, policymakers have addressed the need to encourage and protect innovation and the dynamic efficiencies it produces while simultaneously promoting utilization of generic drugs and the static efficiencies they produce," they write. At present, they say, most patented drugs are challenged; most settlements ensure generic entry before patent expiration; generics account for a large and growing percentage of prescription drug volumes; and market exclusivity periods have not increased.

Update: On June 18, 2013, in a 5-3 opinion, the U.S. Supreme Court declined to hold that reverse payment settlement agreements are presumptively unlawful but also declined to adopt the scope of the patent rule. Instead, the justices said courts reviewing such agreements "should proceed by applying the 'rule of reason,' rather than … a 'quick look' approach."

Read more about the Supreme Court decision

Read the amicus curiae brief