It was a good news, bad news day for drugmakers at the Supreme Court yesterday. On the one hand, the justices didn't seem to buy the Federal Trade Commission's stand that "pay for delay" patent settlements are inherently anti-competitive. But they didn't seem to agree with drugmakers' definition of an A-OK cash settlement, either.
If you've been following the issue, you know that the FTC's "pay for delay" term describes a particular type of patent settlement. When a branded drugmaker pays a generics challenger to refrain from launching a copy until an agreed-upon date, then the agency figures it's a stalling tactic.
The FTC has been dogging drugmakers for years, suing over particular settlements and waving red flags about the costs of delayed generic entry. And that fight finally made its way to the Supreme Court, in the form of FTC v. Actavis, a suit questioning Actavis and Solvay Pharmaceuticals' AndroGel patent settlement.
As the New York TImes reports, the drugmakers in the case argued that cash patent settlements should be legal so long as the generic versions made their debut before the patent's actual expiration date. That's essentially what a lower court ruled in the Actavis case. But "the elephant in the room," said Justice Antonin Scalia, is the actual strength of the patent in question, not its nominal expiration date (as quoted by Reuters).
Meanwhile, Justice Anthony Kennedy suggested that generic companies shouldn't be able to collect more from a branded drugmaker in a patent settlement than they could expect to earn if they actually launched their generic product.
As Bloomberg notes, the justices didn't appear to be willing to let the lower court's ruling stand. Where they actually will fall on the continuum between the FTC's position and the drugmakers' is the question.