Cash-Payment Rule Needed For Pay-For-Delay Litigation Frenzy

The fallout from the Supreme Court’s decision last Summer in FTC v. Actavis remains unabated as a host of purported classes of direct and indirect drug payers continue to file suits against branded and generic manufacturers for settling their Hatch-Waxman disputes in deals involving delayed market entry of cheaper, generic drugs.  While some of the settlements involved a genuine cash “reverse payment” from the branded to the generic manufacturer, as was the case in Actavis, settlements lacking any cash payment are also under attack.  However, a recent dismissal of a pay-for-delay federal suit in New Jersey on the basis that no cash reverse payment was involved will likely cause the Third Circuit and perhaps eventually the Supreme Court to decide whether Actavis’s antitrust “rule of reason” approach can and should be applied to non-cash reverse payment settlements.  [Read more...]

Plaintiff’s Bar and FTC Launch Antitrust Offensive Against Patent Settlements

The Supreme Court’s decision in FTC v. Actavis last June has incentivized a host of direct and indirect payer antitrust class action suits aimed at branded and generic drug manufacturers that settled their Hatch-Waxman patent litigation disputes that included “reverse payments.”  While most of the targeted settlements involved true reverse payments — that is, payments from branded manufacturers to their generic competitors to keep generic versions of products off the market for a period of time — some are taking their cue from the FTC and are challenging patent litigation settlements on antitrust grounds even where no actual reverse payment was made.  From the FTC’s and  plaintiff’s bar perspective, it would appear that any settlement that doesn’t result in immediate generic entry is actionable on antitrust grounds.  But, like so many other positions taken by the Government, does such a viewpoint make common or good policy sense? [Read more...]

Pfizer $149 Million Rapamune Settlement Is More Proof That It’s Business As Usual With The Feds

Two False Claims Act whistleblower lawsuits are being resolved as part of a $491 million settlement between Wyeth Pharmaceuticals, now a division of Pfizer, Inc., and the U.S. DOJ.  This time around, Wyeth’s misconduct was based on off-label sales tactics for Rapamune®, an immunosuppressive drug that FDA approved for use in renal (kidney) transplant patients.  Unfortunately for the pharmaceutical industry, Pfizer’s latest compliance woes are a stark reminder that off-label cases are anything but passé.   [Read more...]

FTC Reveals Plans For Reverse Payment Hatch-Waxman Cases

Ending anti-competitive “pay-for-delay” settlements is a top priority at the Federal Trade Commission, according to FTC Chairwoman Edith Ramirez.   What that means for branded and generic drug makers seeking to settle their patent disputes short of all out litigation remains to be seen . . . but the early indications aren’t good. [Read more...]

Amphastar’s Qui Tam Suit Against Aventis Shows Importance of Patents

In a recent ground-breaking qui tam ruling, a California federal court denied Aventis Pharma’s (a division of Sanofi-Aventis) efforts to dismiss costly and embarrassing False Claims Act (FCA) allegations brought by “whistleblower” and generic rival Amphastar Pharmaceuticals.  In its qui tam suit, Amphastar alleged that Aventis overcharged the Government by inflating prices of enoxaparin, more commonly known as Lovenox®, based on an “inequitable conduct” patent ruling from several years ago.  Although Amphastar’s suit may have been motivated by financial gain, vindictiveness or both, its theory that FCA liability can be predicated on branded drug sales where the drug’s underlying patent(s) have been invalidated is worrisome and could signal a new line of attack for a relator’s bar hungry for new avenues into big pharma’s deep pockets.  [Read more...]

U.K. Jumps on “Pay-to-Delay” Bandwagon

The U.K. Office of Fair Trading (“OFT”) jumped on the “pay-to-delay” bandwagon last week when it issued a “Statement of Objections,” indicating a potential future adverse decision against GlaxoSmithKline (“GSK”) and several generic rivals under the U.K. Competition Act of 1998 in connection with previous patent litigation settlements.  As part of the settlements, GSK made “reverse payments” to the generic companies, which agreed to a delayed entry of generic paroxetine (also known as Seroxat and Paxil) into the U.K. market.   The U.K.’s actions only increases the stakes for branded and generic drug manufacturers awaiting the Supreme Court’s decision (expected in June) on the legality of reverse payment patent litigation settlements under the U.S. antitrust laws. [Read more...]