Pharmaceutical Reverse Payment Settlements: Presumptions, Procedural Burdens, And Covenants Not To Sue Generic Drug Manufacturers
26 SANTA CLARA COMPUTER AND HIGH TECH LAW JOURNAL 141 (2009-2010).
43 Pages Posted: 14 Apr 2020
Date Written: February 23, 2010
Abstract
This Article analyzes antitrust law scrutiny of agreements between pharmaceutical patent holders and generic drug manufacturers that require a generic manufacturer to delay its market entry in exchange for a payment or other consideration from the patent holder. A predictable consequence of settlements that delay the marketing of a generic drug is that prices for the patented drug will remain higher than if the generic competitor had prevailed in its challenge to the patent’s validity or the patent holder had failed to show that the generic infringed on its patent. This Article argues that recent reverse payment settlement court decisions have inappropriately converted procedural presumptions that the plaintiff challenging a patent’s validity bears the burden of proof of invalidity into a substantive shield against antitrust liability. It argues that this presumption is inapplicable when the key issue is whether the generic drug infringed on the patent since there is no presumption of infringement and the patent holder has the burden of proof to make a prima facie case of infringement. It argues that these presumptions and procedural burdens question the conclusion that settlement agreements should be immune from antitrust liability when they are designed to leave the underlying questions of infringement or invalidity undetermined. It also critiques reverse payment settlement decisions that have used improper standards to shift the burden of proof to the generic drug applicant to prove non-infringement or to limit antitrust liability to cases of sham litigation. This article recommends legislative action to promote name-brand drug and generic innovation, safeguard competition, and protect consumers.
Keywords: antitrust, competition, patent litigation, federal trade commission, pharmeceutical reverse payment settlements
JEL Classification: K21, K23
Suggested Citation: Suggested Citation