Table of Contents

More Common Ground for International Competition Law?

More Common Ground for International Competition Law?

ASCOLA Competition Law series

Edited by Josef Drexl, Warren S. Grimes, Clifford A. Jones, Rudolph J.R. Peritz and Edward T. Swaine

In recent years, an impressive proliferation of competition laws has been seen around the world. Whilst this development may lead to greater diversity of approaches, economic arguments may promote convergence. The contributions to this book look at a number of the most topical issues by asking whether the competition world is turning more towards convergence or diversity. These issues include, among others, the changing role of economics in times of economic crises and political change, the introduction of criminal sanctions, resale-price maintenance, unilateral conduct and the application of competition law to intellectual property and state-owned enterprises.

Chapter 11: Three Statutory Regimes at Impasse: Reverse Payments in Pay-for-Delay Settlement Agreements between Brand-name and Generic Drug Companies

Rudolph J.R. Peritz

Subjects: law - academic, competition and antitrust law


Rudolph J.R. Peritz Bayer AG recently paid $398 million to generic competitors in exchange for their promise to stay off the market for Ciprofloxacin for the next six years.1 Cipro, as it is called, is a widely used antibiotic. In these agreements to settle patent infringement cases, Bayer made reverse payments – so called because they were paid by the plaintiff patent holder to the accused infringers.2 There is outrage in the United States over these pay-for-delay agreements. President Obama’s proposed budget declares that his ‘administration will prevent drug companies from blocking generic drugs from consumers by prohibiting anticompetitive agreements and collusion between brand name and generic drug manufacturers intended to keep generic drugs off the market.’3 The most recent Bill to prohibit such settlement agreements has recently been sent to the United States Senate from the Judiciary Committee.4 The public outrage and political responses 1 In re Ciprofloxacin Hydrochloride Antitrust Litigation, 363 F Supp 2d 514 (EDNY 2005), aff’d, 544 F.3d. 1323 (Fed. Cir. 2008). 2 Useful treatments of this subject include CS Hemphill, ‘Paying for Delay’ (2006) 81 NYU L Rev 1553; C Shapiro, ‘Antitrust Limits to Patent Settlements’ (2003) 34 Rand J Econ 31; M O’Rourke and JF Brodley, ‘An Incentives Approach to Patent Settlements’ (2003) 87 Minn L Rev 1767; M Carrier, ‘Unsettling Drug Patent Settlements: A Framework for Presumptive Illegality’ (2009) 108 Mich L Rev 37. 3 (accessed November 2009). 4 Reported in ‘Senate Judiciary Committee Approves Bill Banning Reverse Payment Agreements’...

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