James M. Burns Comments on Significant District Court Ruling that Interprets the Supreme Court's Actavis "Pay for Delay" Decision

September 23, 2013
James M. Burns, a Member in Dickinson Wright’s Washington D.C. office and co-leader of the firm’s antitrust practice, provided comments to the BNA Pharmaceutical Law and Industry Report regarding a recent District Court ruling in In re Nexium (Esomeprazole) Antitrust Litigation, D. Mass., No. 1:12-md-02409-WGY, 9/11/13. The decision is one of the first to interpret the Supreme Court’s decision earlier this year in FTC v. Actavis, wherein the Supreme Court held that, in some circumstances, a payment by a branded drug manufacturer to a generic, allegedly to induce the generic to refrain from entering the market (so called “pay for delay” settlements), could give rise to antitrust liability.

In Nexium, the District Court held that Actavis should not be understood to be limited to circumstances in which the branded drug manufacturer makes a direct payment to the generic (as the defendants argued), but can also include indirect payments as well. Accordingly, the District Court in Nexium held that the plaintiffs’ allegations concerning indirect payments were sufficient to plead their antitrust claims, rejecting the defendants’ efforts to have the claims dismissed.

Mr. Burns told BNA that the decision is quite significant, because the Court’s broad reading of Actavis suggests that, in the future, it will likely be much more difficult for drug companies to get reverse payment cases dismissed in the early stages of litigation. He also said that the Federal Trade Commission “is likely silently cheering the Court’s ruling in Nexium, as it confirms that the Supreme Court’s ruling in Actavis, despite its measured tones, was a broad victory for the FTC’s position” on the “pay for delay” issue.

A link to the full article in the BNA Pharmaceutical Law & Industry Report containing his comments can be found here.
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