The Third Circuit recently revived a suit accusing pharmaceutical companies of delaying generic competition for Lipitor and Effexor XR, a decision that will bolster drug buyers in pay-for-delay cases by beating down the specter of higher hurdles against bringing the suits.
In last week's decision, the appeals court said the buyers had adequately pled that Pfizer Inc. and Ranbaxy Laboratories Inc., in the Lipitor case, and Wyeth Inc. and Teva Pharmaceutical Industries Ltd., in the Effexor case, penned patent dispute settlement agreements that unlawfully delayed generic competition for the drugs.
The three-judge panel reversed U.S. District Judge Peter G. Sheridan, who had dismissed the cases partly on the grounds that they did not give an adequate estimate of the sizes of the so-called reverse payments from brand- to generic-drug companies in the settlements. Under the U.S. Supreme Court’s landmark ruling in 2013’s FTC v. Actavis — in which the high court said pay-for-delay agreements were subject to antitrust scrutiny under the rule of reason — plaintiffs are not required to come up with such an estimate at the dismissal stage, the Third Circuit said.
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