FTC v. Actavis: Are Reverse Payment Settlements Antitrust Immune?

The purpose of this article is to analyse the Supreme Court’s decision in FTC v. Actavis and to provide an overview of the legal debate on reverse payment settlements in the U.S. and the EU. First, the facts and the holdings of the District and the Appellate Court on the Actavis settlement are presented. Second, an analysis of the scope of the patent test, the presumptive illegality approach and the Actavis rule of reason follows. Third, the main legal issues arising from the Supreme Court’s decision in Actavis are discussed, focusing on the question of no-authorized generic commitments in the context of the Effexor XR Antitrust Litigation. Finally, the European Commission’s initiatives on reverse payment settlements and the Lundbeck case are briefly presented. The decision of the General Court of the European Union in the Lundbeck case will be the first to set the standard for the review of reverse payment settlements under European competition law. This article aims to stress the need for the European Union to benefit from the troubled U.S. experience on reverse payment settlements.