Court reverses dismissal of challenge to drug-patent settlement

King Drug Co. v. Smithkline Beecham — patent — reversal — Scirica

In 2013, the Supreme Court held in FTC v. Actavis that, when the holder of a drug patent sues a competitor for patent infringement but then settles that suit by making a payment to the alleged infringer — a “reverse payment” — such a payment can violate antitrust laws.

Today, the Third Circuit held that the holding of Actavis applies not only to reverse payments in the form of cash, but also reverse payments in a non-cash form, where the patent holder relinquishes its future right to compete with the alleged infringer by making an authorized generic drug.

Joining Scirica were Ambro and Roth. Arguing counsel were Bruce Gerstein for the appellants, Mark Hegedus for the FTC as amicus, Barbara Mather of Pepper Hamilton for the patent-holder, and Jay Lefkowitz of Kirkland & Ellis for the alleged infringer.

Early coverage in New Jersey Law Journal here and the WSJ Pharmalot blog here.