Supreme Court hears arguments in FTC v Actavis

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Supreme Court hears arguments in FTC v Actavis

supct45new.jpg

Supreme Court justices seemed divided on Monday over the legality of pharmaceutical companies paying generic rivals to keep cheaper alternatives to brand name drugs off the market.

supct.jpg

In Federal Trade Commission v Actavis, the justices heard oral arguments concerning the legality of so-called reverse payment agreements.

The case concerns a fee paid to Actavis by Solvay Pharmaceuticals, which owns a patent on testosterone-raising drug AndroGel. In exchange, Actavis agreed not to produce a generic version of AndroGel for an agreed period.

The FTC claimed the agreement amounted to illegal collusion. Actavis argued that such payments are legal provided the generic company’s delay in producing the drug is limited to the period in which the patent is valid.

But the justices seemed more concerned with the economic impact of the deals.

Justice Anthony Kennedy suggested that reverse payments should not exceed what the generic company could make by launching a competing drug, while Justice Elena Kagan said the companies involved were harming consumers by “splitting monopoly profits”.

Justice Antonin Scalia seemed to attribute the situation to a loophole in the Hatch-Waxman laws, and questioned why the court should correct a “mistake” made by Congress.

The case was previously referred to as Federal Trade Commission v. Watson Pharmaceuticals et. Al, before the combination of Actavis and Watson.

more from across site and SHARED ros bottom lb

More from across our site

National groups for the UK and the Netherlands have flagged concerns with the choice of venue, following a formal complaint from Australia’s national group
Rasenberger is the CEO at the Authors Guild in the US
Vold-Burgess is the client director at Acapo Onsagers and the former CEO at Acapo in Norway
Williams is the CEO of the UKIPO in the UK
Orliuk is director of the Ukrainian IP office
Julie is chief IP counsel at Teva in the US
Ludlam is chief IP and litigation officer at Lenovo, while Maharaj is chief licensing officer for Ericsson in the US
Campinos is the president of the EPO in Munich
AlSwailem is the CEO of Saudi Authority for Intellectual Property in Saudi Arabia
Ridings, Orozco and Diego-Fernández Andrade are appeal arbitrators at the WTO in Switzerland
Gift this article