Supreme Court Ruling Upholds Patent Settlements with Consideration as a Valid Means to Generic Access for Patients

Published Online: Tuesday, July 23, 2013
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The Generic Pharmaceutical Association (GPhA) welcomes the June 2013 decision from the Supreme Court in the FTC vs. Actavis case, upholding several previous rulings from district courts that recognize the complex nature of these cases, and rejecting the Federal Trade Commission’s assessment that all settlements with consideration are presumptively illegal.

“Today, generic drugs are more available to patients than they have ever been, and we want to preserve every legal avenue to continue that success,” said Ralph G. Neas, President and CEO of the GPhA. “The fact is that patent settlements have resulted in hundreds of generic options coming to market -- on average nearly five years in advance of the brand patent’s end date. This means billions of dollars in savings for consumers and the health system.”

“We are pleased that the Court clearly recognized that settlements require a case-by-case assessment. In establishing the ‘rule of reason,’ and leaving the decision to lower courts, the ruling continues to provide a lawful pathway for companies to resolve disputes through settlements,” continued Neas. “This preserves all options for generic manufacturers to bring lowercost generic medicines to patients as soon as possible.”

At the same time, the Court’s ruling will require generic companies to take on a greater administrative burden to pursue a patent challenge, potentially lowering the number of challenges. As a result, consumers may have access to fewer generic options.

Generic companies assert patent challenges under the 1984 Hatch-Waxman law, which is intended to balance incentives for innovative new drugs with speeding lower cost generic medicines to the market. With generics making up more than 84% of the market, Hatch-Waxman has been a proven success in providing choices to patients and cost-savings to the U.S. health care system for nearly 30 years. In the last 10 years alone, generic drugs have saved consumers and the health system more than a trillion dollars.

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