Research Project

Investigator:
Nicole Daniel

Abstract:
In recent years, reverse-payment settlement agreements, also called “pay-for-delay agreements”, have come under scrutiny of both the American Federal Trade Commission and the European Commission.

By entering a pay-for-delay agreement, a brand name drug manufacturer essentially pays a generic drug manufacturer to delay entry into the market. In the landmark decision Federal Trade Commission v. Actavis Inc., the US Supreme Court held in 2013 that pay-for-delay agreements could sometimes violate antitrust laws and adopted a rule of reason approach requiring antitrust plaintiffs to show anticompetitive effects of the agreement at issue.

At around the same time the European Commission handed down its first decision on a pay-for-delay agreement in the Lundbeck case, finding it to be a restriction by object; i.e. treating such an arrangement as infringement regardless of whether it has an anticompetitive effect. This decision was upheld by the General Court in September 2016.

This research will analyze and compare these differing approaches thereby aiming to stimulate the discussion as to whether one approach is preferable to the other and whether the EU and the US should aim to develop a global approach on pay-for-delay agreements, taking account of their different legal systems.