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11th Cir. rejects FTC claim that AndroGel reverse payments protect monopoly profits

 |  April 25, 2012

The U.S. Court of Appeals in Atlanta has rejected the FTC’s appeal of a district court ruling that granted pharmaceutical companies’ motion to dismiss. The FTC claimed that a pay for delay settlement between brand name and generic drug companies constituted an unlawful agreement not to compete in violation of Section 5(a) of the Federal Trade Commission Act.

The specific prescription drug at issue is AndroGel, developed by Besins and licensed by Solvay Pharmaceuticals. The generic manufacturers of AndroGel are Watson Pharmaceuticals and Paddock Laboratories. The FTC claimed that Solvay was unlikely to prevail on its infringement claims, and thus that the reverse payments protect monopoly profits.

The court, however, stated the rule that “a reverse payment settlement is immune from antitrust attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent.” The fact that an infringement claim is likely to fail, as the FTC framed the argument, does not mean that the patent has no exclusionary potential.

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Related content2025: Reverse-Payment Settlements Unleashed (Michael Carrier, Rutgers University School of Law)


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