DOJ Formally Aligns Itself With FTC In Opposition To Reverse Payment Settlements

The new Department of Justice, with Christine Varney at the helm of its antitrust division, has changed course to finally (and formally) align itself with the Federal Trade Commission in opposition to reverse payment settlements in the pharmaceutical industry. On July 6, 2009, the DOJ filed a brief with the Second Circuit (at the court's invitation) in In re Ciproflaxin Hydrochloride Antitrust Litigation which marks the DOJ's first formal opposition to reverse payment settlements, i.e., settlements of patent disputes in which the brand drug-maker makes a "reverse" or "exclusion" payment to the would-be generic competitor to delay its entry into the relevant drug market. This represents a significant departure from the DOJ of the Bush era, which took a stance contrary to the FTC's before the U.S. Supreme Court, even criticizing its sister agency's "high degree of suspicion of any reverse payment settlement."

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