FTC Amicus Brief urges Court of Appeals to reverse DC ‘No-Authorized Generic’ commitments ruling

The US Federal Trade Commission filed an Amicus Brief in the US Court of Appeals for the Third Circuit, urging it to reverse a district court dismissal in the case of Lamictal Direct Purchaser Antitrust Litigation.

The district court found that agreements between branded and generic drug makers that include the branded firm’s commitment not to introduce an “authorized generic” cannot violate the antitrust laws under FTC v Actavis Inc (NYSE: ACT), because they do not involve the payment of “cash.” The FTC’s brief explains why the District Court’s conclusion is erroneous.

In Actavis, the US Supreme Court held that “reverse-payment” patent settlements – agreements in which a brand-name drug manufacturer pays a would-be competitor to abandon its patent challenge and agrees not to sell its generic drug product for a number of years – are not immune from antitrust scrutiny and are to be evaluated using traditional antitrust factors.