FTC and TEVA Reach Settlement in Reverse-Payment Antitrust Litigation

TEVA prohibited from providing compensation in the form of a business transaction and a no-Authorized Generic (AG) commitment

The FTC has reached settlement with TEVA Pharmaceuticals in three antitrust lawsuits addressing reverse-payment settlement agreements in patent cases. Under the terms of the revised stipulated order – yet to be entered by the court (available here), TEVA is prohibited for 10 years from entering into patent litigation settlement agreements that contain what the FTC has termed in its Press Release (available here) as “the two most pernicious and common forms of reverse payments: (1) a side deal, in which the generic company receives compensation in the form of a business transaction … and (2) a no-AG commitment.” The no-AG commitment is an agreement whereby a Brand company agrees to not market an AG product in competition with a generic version for a specified period of time. This no-AG commitment is a new prohibition introduced into the revised stipulated order; the original stipulated order (available here), having been agreed to on May 21, 2015, included no such prohibition.

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