FTC Takes 4-In-1 Shot At Reverse Payment Settlements

The Federal Trade Commission has taken the next step in its long battle against "reverse payment settlements" that some argue delay entry by generic pharmaceutical manufacturers.  On February 13, 2008, the FTC filed a complaint against Cephalon, Inc., alleging that the company illegally extended its monopoly over its sleep disorder drug, Provigil, by paying four generic drug manufacturers to delay entry as part of patent litigation settlements with each generic.  According to the Commission, each of these four agreements is an unlawful act of monopolization.

The case, brought in the U.S. District Court in the District of Columbia, is extremely significant for brand and generic manufacturers faced with these business and legal decisions.  This litigation represents the latest move in an effort by the FTC to develop the law in this area, and the outcome of this litigation could significantly impact the