Court Applies ‘Rule of Reason’ in ‘Pay-for-Delay’ Opana Case
A recent 5th Circuit Court of Appeals decision in a case involving a reverse payment from Endo to Impax for Endo’s Opana ER (oxymorphone) is important for two reasons, according to attorney Sara Koblitz (Hyman, Phelps & McNamara). Writing in her firm’s FDA Law Blog, Koblitz says the decision reaffirmed the utility of the Federal Trade Commission’s (FTC) review of patent agreements and also, for the first time, clearly applied the “rule-of-reason” framework laid out in a 2013 FTC case against Actavis, including the necessary shifting of burdens.
“It’s clear that the framework leaves room for justification as to the procompetitive benefits of such a settlement, suggesting that each settlement truly will be evaluated on a case-by-case basis,” Koblitz writes. “Unlike the recent California pay-for-delay law, in which these types of settlements are presumptively anticompetitive, the court’s analysis here leaves room for sponsors to continue negotiating these types of settlements, as long as the terms are justifiable and ultimately beneficial to the public. Nevertheless, the decision’s deference to FTC’s determination that a no-payment settlement, which theoretically should be available in any patent settlement, is a feasible less restrictive alternative to a reverse-payment settlement suggests that FTC’s unspoken anticompetitive presumption may be difficult to overcome.”