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Sowing Uncertainty: Navigating Patent Disputes and Antitrust Scrutiny Post King Drug

On August 5, 2015 by Schnader

On June 26, 2015, the Third Circuit issued an opinion in King Drug Co. of Florence, Inc. v. Smithkline Beecham Corp., (Case No. 14-1243). King Drug. The opinion, which already has been extensively commented on and scrutinized, purports to follow the Supreme Court’s holding in FTC v. Acatvis, Inc. Actavis holds that patent dispute settlements consisting of reverse cash payments from a brand drug manufacturer to a generic drug manufacturer are subject to rule of reason scrutiny. King Drug holds that, similarly, non-cash settlements in which a patentee drug manufacturer agrees to relinquish its right to produce an “authorized generic” of the drug (a “no-AG agreement”) to compete with a first-filing generic drug’s 180-day exclusivity period, are subject to antitrust scrutiny under a “rule of reason analysis.”

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