US FTC submits amicus brief on "no-authorized generic" deals to delay generic competition

The US Federal Trade Commission this week filed an amicus brief in the US District Court for the District of New Jersey stating that an agreement by a branded drug company not to launch an authorized generic (AG) drug “provides a convenient method for branded drug firms to pay generic patent challengers for agreeing to delay entry.”

In a “no-AG” agreement, the branded firm, as part of the patent litigation settlement, agrees that it will not launch its own generic alternative when the first generic begins to compete. Since the introduction of the branded AG would cut into the revenues of a competing generic product, a no-AG commitment can induce the generic firm to delay entry of its product to the market. Thus, the Commission concludes, a no-AG commitment is legally sufficient to trigger a rebuttable presumption of illegality under the law of the Third Circuit.

Case of Lamictal Direct Purchaser Antitrust Litigation