Document Type

Article

Publication Date

2014

Abstract

The Actavis decision punted more than it decided. Although narrowing the range of possible outcomes by rejecting the legal rules at the extremes and opting for a rule of reason middle ground, the opinion failed to grapple with the most challenging issues of regulatory policy raised by pharmaceutical patent settlements. In particular, it failed to clearly delineate the social costs of permitting and disallowing patent settlements, avoided grappling with the crucial issues of patent validity and infringement, and erroneously focused on “reverse payments” as a distinctive antitrust problem when equally or more anticompetitive settlements can be crafted without reverse payments. Although Actavis is a frustrating opinion, it is perhaps too much to expect judges to solve the patent settlements challenge. As we enter the post-Actavis phase of antitrust litigation over branded-generic settlements, it will become increasingly clear that a comprehensive regulatory solution is needed.