This case presented the question whether an agreement by a brand-name drug manufacturer (and patent holder) to share a portion of its future profits with a generic manufacturer, in exchange for the generic’s agreement not to market the drug as permitted by federal law, is a violation of the antitrust laws. The Eleventh Circuit Court of Appeals held that such name-brand/generic agreements were effectively immune from antitrust scrutiny, and the FTC petitioned the U.S. Supreme Court for review.
Public Citizen filed an amicus curiae brief on behalf of Rep. Henry Waxman, co-sponsor of the law permitting competition by the generic manufacturers, in support of the FTC. In a 5-3 decision, the Supreme Court ruled in favor of the FTC. The Court held that reverse-payment settlement agreements may be, but are not necessarily, unlawful, and that courts reviewing such agreements should proceed by applying the “rule of reason,” rather than under a “quick look” approach.