A survey of cases of the pay-for-delay agreement in the post-Actavis era

What are the further developments on pay-for-delay agreements following Actavis, the case decided by the US Supreme Court regarding a pay-for-delay dispute in 2013? We surveyed 17 pay-to-delay deals involving brand-name drug owners and generic companies to see how their deals were structured in light of Actavis, as well as the results of follow-on court cases involving such contracts. As a result, we posit here that a no-Authorized Generic (AG) provision, the clause in a pay-for-delay agreement that asks the company making the brand-name drug not to launch its own generic drug in the market, occurred in almost half of the deals in our survey. More importantly, we found that the judges in cases following Actavis did not establish a framework to analyse whether pay-for-delay payments were large and unjustified. Therefore, the judges could not adequately explain why a given pay-for-delay agreement may have been anti-competitive under the rule-of-reason test under Actavis. Through these findings, we inferred that drug manufacturers should be able to avoid including no-AG provisions in their settlements. Finally, we predicted that antitrust agencies and courts would achieve a stronger interpretation of ‘large and unjustified payments’ if they unified the analytical framework for pay-for-delay agreements.