FTC Emboldened by Supreme Court’s Pay-to-Delay Ruling

The Federal Trade Commission (FTC) has vowed to take aggressive action after the U.S. Supreme Court ruled favorably on the agency’s right to challenge so-called pay-to-delay agreements. However, it is also calling on Congress to move forward with stronger laws prohibiting such settlements.

Pay-to-delay agreements are used in the pharmaceutical industry where brand name drug makers agree to resolve patent infringement suits against generic drug makers by paying them to delay selling competing drugs for a specified In Federal Trade Commission v. Actavis, Inc., the Supreme Court ruled that pay-to-delay agreements could violate anti-trust laws.

The FTC plans to use the precedent to aggressively attack settlements that its sees as anticompetitive, Chairwoman Edith Ramirez told a Senate subcommittee recently. However, she also voiced support for proposed legislation that would formalize the agency’s argument in Actavis. The bill, co-sponsored by Senator Amy Klobuchar (D-Minn.) and Senator Chuck Grassley (R-Iowa), would make pay-to-delay agreements presumptively illegal.

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