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Litigation | Tuesday, sepTember 8, 2015 | S5

California supreme Court. these decisions and may include other vehicles that provide generic’s 180 day exclusivity period. In In re approach applied only to reverse payments

indicate how Actavis may be applied with a net transfer of value to the generic, such Nexium (Esomeprazole) Antitrust Litig., 968 of money, and dismissed the antitrust claims.
respect to a number of key issues, including as “no-authorized generic” agreements, side f. supp. 2d 367, 392-94 (d. mass. 2013), allega- see Lamictal, 2014 wl 282755, at *7-8.
what constitutes a reverse payment, under agreements, co-promotion agreements, or tions of anticompetitive conduct based on the third Circuit reversed, holding that
what circumstances it may be necessary (or supply agreements. In re Aggrenox Antitrust an agreement not to market an authorized Actavis is not limited to reverse payments of
possible) to litigate the validity or infringe- Litig., __ f. supp. 3d __, 2015 wl 1311352, generic were sufficient to avoid a motion cash. Instead, it found, other forms of con-
ment of the patent, and how Actavis may *11 (d. Conn. mar. 23, 2015) (collecting deci- to dismiss. see also In re Niaspan Antitrust sideration, including “no authorized generic
be applied to claims under state antitrust sions); Time Ins. Co. v. Astrazeneca AB, 52 f. Litig., 42 f. supp. 3d 735, 751-52 (e.d. penn. agreements” are valuable, have “anticompeti-
statutes.
supp. 3d. 705, 710 (e.d. penn. 2014) (“reverse 2014) (opining that “a [no-authorized generic] tive consequences [that] may be as harmful
payments deemed anti-competitive pursu- provision works exactly as would a payment as those resulting from reverse payments of

nature and size of the payment
ant to Actavis may take forms other than of cash” in inducing generic to delay entry).
cash,” and “may prevent the risk of competi-
cash payments”). thus, the emerging trend In King Drug v. SmithKline Beecham, the tion.” King Drug, 2015 wl 3967112, at *11. the
Courts have generally held that Actavis appears to be that an antitrust plaintiff may Court of appeals for the third Circuit, revers- court held that an agreement not to market an
requires that, to state an antitrust claim based allege non-cash consideration as a reverse ing the district court, held that an agreement authorized generic is subject to antitrust scru-
on a patent litigation settlement, a plaintiff payment. however, some courts have ruled by the patent owner not to market an autho- tiny under the rule of reason because “it may
must show a “reverse payment” from the pat- that in the case of a non-cash reverse pay- rized generic could subject a patent litigation represent an unusual, unexplained transfer of
ent owner to the generic that is both “large” ment, the plaintiff must allege some reliable settlement to antitrust scrutiny. glaxosmith- value from the patent holder to the alleged
and “unexplained.” see, e.g., In re Effexor XR way of estimating the monetary value of the kline (gsk), the patent owner, sued teva for infringer that cannot be adequately justified.”
Antirust Litig., 2014 wl 4988410, *18 (oct. consideration, and must allege “a reliable patent infringement after teva sought fda Id. at *14. It rejected gsk’s argument that

6, 2014).
foundation” for that value in order to estab- approval for a generic version of the drug an agreement not to market an authorized
Courts have split on what constitutes a lish the plausibility required for pleadings by lamictal. after a decision finding a key claim generic simply grants the generic an exclusive
“payment” under Actavis. two district courts rule 12(b)(6). Effexor, 2014 wl 4988410, at of the patent invalid, gsk and teva agreed license in a manner specifically authorized by
have taken the position that Actavis is limited *20; In re Lipitor Antitrust Litig., 46 f. supp. to settle, ending teva’s challenge to gsk’s the patent statute, see 35 u.s.C. §261, holding
to cash payments, and does not include other 3d 532, 543 (d.n.J. 2014).
patent, in exchange for gsk’s commitment that even exclusive licenses “cannot avoid
transfers of value. see In re Loestrin 24 Fe several challenged settlements have not to produce an authorized generic ver- antitrust scrutiny where they are used in anti-
Antitrust Litig., 45 f. supp. 3d 180, 193-94 (d.r.I. involved an agreement by the patent owner sion of lamictal. various direct purchas- competitive ways” and that the fact that the
2014); In re Lamictal Direct Purchaser Antitrust not to sell an “authorized generic” to compete ers of lamictal sued, alleging that the “no patent holder may generally have the right to

Litig., 18 f. supp. 3d 560, 568-69 (d.n.J. 2014), against the generic during the 180-day period authorized generic” agreement constituted a grant licenses does not mean that the patent
rev’d sub nom King Drug Co. v. SmithKline when only the first abbreviated new drug reverse payment “designed to induce teva to owner may use that power to “eliminat[e]
Beecham, __ f.3d __, 2015 wl 3967112 (3d Cir. application (anda) filer is permitted to sell abandon the patent fight and thereby agree to the risk of competition. King Drug v. Smith-
2015). however, one of these decisions was a generic product. an “authorized generic” reduce the risk of competition” in an alleged Kline Beecham, 2015 wl 3967112, at *12.
recently reversed by the third Circuit, and is one made by the patentee who typically market for lamictal and its generic substi- Courts have also considered the circum-
the majority of courts have now held that has the original drug approval from the fda; tutes. 2015 wl 3967112, at *1. the district stances under which a supply or service
“payments” are not limited to cash transfers,”
as such it can be sold during the first-filer
court held that the Actavis rule of reason
agreement, in which the gener- » Page S11

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