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Pay-for-Delay Agreements Not Immune to Antitrust Scrutiny
Consumers, government entities and others interested in the reduction of the costs of medications are celebrating the Federal Trade Commission's (FTC) victory before the U.S. Supreme Court in FTC v. Actavis Inc. The court's ruling in the case means the FTC has the authority to step in and challenge so-called pay-for-delay agreements between patent-holding pharmaceuticals manufacturers and would-be competitors seeking to market generic versions of the patented drugs.
The FTC has long contended that these types of agreements are often entered into as a means of maintaining a monopoly on a certain drug market, allowing the patent holder to charge inflated prices to consumers who are left without other options. But the lower courts that addressed the FTC's contention that it needed to review a pay-for-delay agreement between two pharmaceuticals manufacturers concluded that the agency had no case so long as the patent at issue was still in force. They reasoned that, even if the patent might ultimately prove invalid, opening the door for generic sales, the public policy in favor of settlement of legal disputes took precedence, and the parties to those disputes could not be forced to go to litigation in order to avoid antitrust scrutiny.
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