FTC amicus brief urges Appeals Court to reverse District Court ruling that insulates pharma companies from antitrust scrutiny

The USA’s Federal Trade Commission has filed an amicus brief in the US Court of Appeals for the Third Circuit urging the court to reverse a district court ruling that an alleged reverse-payment settlement of patent litigation did not violate the antitrust laws, in part, because the FTC did not object to the proposed settlement when the companies submitted it to the agency.

The case concerns allegations that Wyeth Pharmaceuticals, a subsidiary for US pharma giant Pfizer (NYSE: PFE) since 2009, agreed not to launch an “authorized generic version” of the antidepressant drug Effexor XR to induce the local subsidiary of Israel’s Teva Pharmaceuticals Industries (NYSE: TEVA) to abandon its patent challenge and refrain from selling generic Effexor XR (venlafaxine extended-release) for two years. Such transactions are also called pay-for-delay deals.

The amicus brief explains that neither submission of a patent litigation agreement to the FTC nor the FTC’s decision not to take action insulates the settling parties from antitrust liability.