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U.S.: Supreme Court to hear pharmaceutical reverse payments case

By  |  December 10, 2012
U.S.: Supreme Court to hear pharmaceutical reverse payments case

The U.S. Supreme Court announced Friday that it will hear a case that will settle a decades-long battle over whether pharmaceutical giants can pay competitors to prevent selling a generic form of a best-selling drug, a practice known as reverse payment patent settlements. Over the years, federal regulators have said the practice is in violation of antitrust law; pharmaceutical companies, on the other hand, argue the practice settles patent disputes and is a way to protect their product into which they have poured billions of dollars. A federal appeals court in Philadelphia was the first time the practice has been ruled in violation of competition law; three previous federal circuit courts of appeal have ruled that the practice is not illegal. The Federal Trade Commission was the first to file the suit in 2009, arguing that blocking generic drug sales raises prices and hurts consumers. A bill was drafted last year in Congress to outlaw the practice of paying off makers of generic forms of drugs, but it never made it to the floor.

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    For more commentary on reverse payments, read our June 2012 Chronicle.

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