U.S. District Court dismisses AndroGel reverse payment antitrust claims

On 22 February 2010 the U.S. District Court for the Northern District of Georgia (Atlanta Division) granted defendants’ motions to dismiss antitrust claims brought by the Federal Trade Commission (“FTC”) among others that reverse payments settlements and related commercial arrangements between the brand name manufacturer of AndroGel (Solvay Pharmaceuticals, Inc.) and several generic pharmaceutical manufacturers delayed generic entry and violated U.S. antitrust laws (see Newsletter 2/2009 p. 2).

Following the 11th Circuit’s case-law, the Court applied an approach based on examining whether the challenged agreements extend beyond the scope of the patent concerned and, if so, result in anti-competitive effects. The Court rejected the idea of holding reverse payment settlements presumptively unlawful as inconsistent with the 11th Circuit precedents. Accordingly, as the plaintiffs according to the Court did not allege that the settlements extend beyond the claims and duration of the patent concerned, it dismissed the reverse payment claims.

The Court rejected the argument of the FTC and others that the scope of a patent also includes the likelihood of the patent holder prevailing in patent litigation as inconsistent with the 11th Circuit’s reasoning. The Court expressed concerns that considering the likely outcome of patent litigation would — by creating uncertainty —tend to discourage settlements.

However, the Court refused to dismiss sham litigation claims based on the patent not being infringed and being invalid, as they were not precluded by the scope of the patent approach and sufficient facts were alleged to support the claim. Further, while not rejecting them as precluded by the scope of the patent approach, the Court dismissed a claim that the defendants participated in a scheme to monopolize the market for generic AndroGel, due to not identifying a combined effect of such a scheme beyond the alleged practices of improper Orange Book listing, sham litigation, and settlements. The Court also refused to consider a claim that generic companies conspired among themselves, outside the scope of any patent rights, due to the claim having been asserted too late.

In re Androgel Antitrust Litigation (No. II), No. 1:09-MD-2084-TWT, Feb. 22, 2010.  [Juha Vesala]