Supreme Court Lets So-Called "Reverse Payment" Stand

Summary: On March 7, 2011, the U.S. Supreme Court denied a petition for a writ of certiorari filed by various drug purchasers in which they asked the Court to review so-called reverse payments, an arrangement that settles patent litigation brought by brand-name drug manufacturers against generic manufacturers. Under a so-called reverse payment arrangement, the brand-name manufacturer makes a payment to the generic manufacturer in consideration for the generic manufacturer’s agreement not to produce the challenged product.

The Court’s denial let stand a Second Circuit decision that rejected antitrust claims based on a settlement between Bayer AG, the owner of a patent for ciprofloxacin (“Cipro”), and Barr Laboratories, Inc., a generic manufacturer that had challenged the patent. The attached Client Alert provides the background leading up to, and the significance of, the Supreme Court’s denial.