The End Of "Pay For Delay"?

More brand-name drug companies have been paying their competitors to delay their efforts to bring generic versions of blockbuster pharmaceuticals to market.

The Federal Trade Commission estimates there were 28 "reverse payment" agreements in 2011—twice the number in 2007—involving 25 different branded pharmaceuticals with annual U.S. sales of more than $9 billion.

A string of U.S. Court of Appeals decisions over the past several years seemed to confirm the legality of reverse payments until this past July, when the Third Circuit ruled that they are presumed to be anti-competitive. The decision, involving Schering-Plough's potassium drug K-Dur, revived the FTC's flagging crusade against reverse payments, says Roxann Henry, an antitrust litigator who recently joined Morrison & Foerster. Given the conflicting appeals court opinions and the lack of any forthcoming legislative solution, Henry says there's a good chance the Supreme Court will take up the issue in 2013,