US FTC issues amicus brief on reverse-payment agreement involving GSK and generics

The US Federal Trade Commission (FTC) has urged the Court of Appeals to correct four errors in a district court’s analysis of an alleged reverse-payment agreement involving UK pharma giant GlaxoSmithKline (LSE: GSK) and generics firms Teva Pharmaceuticals (NYSE: TEVA) and Anchen Pharmaceuticals .

The FTC, the body set up to protect the USA’s consumers and promote competition, has filed an amicus brief, which is an intervention by a party which is not involved in a particular litigation but can advise the court on a matter of law, with the higher court.

The brief explains that the district court was wrong to conclude that the rule-of-reason analysis prescribed by the Supreme Court’s 2013 decision in FTC v Actavis Inc, did not apply in this case, because, unlike in the earlier case, the parties’ agreement allowed the underlying patent litigation to continue even though it precluded generic entry until the litigation was resolved.