Federal Judge Holds that Actavis Is Not Limited to Cash Payment Settlements | Practical Law

Federal Judge Holds that Actavis Is Not Limited to Cash Payment Settlements | Practical Law

Judge Peter Sheridan of the US District Court for the District of New Jersey held that pursuant to the US Supreme Court's recent decision in FTC v. Actavis, Inc., a proposed class of plaintiffs in In re Lipitor Antitrust Litigation is allowed to amend its complaint to expand its allegations of reverse non-cash payments made by the defendant pharmaceutical companies.

Federal Judge Holds that Actavis Is Not Limited to Cash Payment Settlements

Practical Law Legal Update 0-540-6165 (Approx. 4 pages)

Federal Judge Holds that Actavis Is Not Limited to Cash Payment Settlements

by Practical Law Antitrust
Published on 10 Sep 2013 • USA (National/Federal)
Judge Peter Sheridan of the US District Court for the District of New Jersey held that pursuant to the US Supreme Court's recent decision in FTC v. Actavis, Inc., a proposed class of plaintiffs in In re Lipitor Antitrust Litigation is allowed to amend its complaint to expand its allegations of reverse non-cash payments made by the defendant pharmaceutical companies.
On September 5, 2013, US District Court for the District of New Jersey Judge Peter Sheridan held that pursuant to the US Supreme Court's recent decision in FTC v. Actavis, Inc., a proposed class of plaintiffs in In re Lipitor Antitrust Litigation is allowed to amend its complaint to expand its allegations of non-cash reverse payment settlements. Judge Sheridan held that:
  • The Actavis decision does not limit the definition of reverse payments to cash payments only.
  • The plaintiffs would be allowed to allege that a settlement between Pfizer, Inc. and Ranbaxy, Inc. that delayed market entry of a generic version of the drug Lipitor was a form of a reverse payment settlement despite the fact that there was no cash payment.
Judge Sheridan's ruling is one of the first to address the Actavis decision as it applies to non-cash reverse payment settlements. Additionally, the holding mirrors the FTC's argument in an amicus brief filed earlier this summer in In re Effexor XR Antitrust Litigation (for more information on the FTC's amicus brief, see Legal Update, FTC Files Amicus Brief to Expand the Holding of Supreme Court's Actavis Decision to Non-Cash Reverse Payment Settlements).
Judge Sheridan noted that while Actavis does not preclude allegations of non-cash reverse payments, he will decide later whether the amended allegations will be sufficient to survive a motion to dismiss.
Court documents: