Shook, Hardy & Bacon Of Counsel Amy Foust has authored an article for The AIPLA Antitrust News analyzing two competing bills that address "so-called 'pay-for-delay' settlements in Hatch-Waxman litigation." Introduced September 2015, The Preserve Access to Affordable Generics Act (S. 2019) and The Prescription Drug Affordability Act (S. 2023) both seek to eliminate "reverse-payment settlements," which the Federal Trade Commission (FTC) defines "as a promise from a generic drug firm to not market a product for a period of time in exchange for payments from a brand name drug manufacturer."
In particular, Foust examines differences between the two bills that "may be practically important for NDA holders and ANDA filers," including "safe harbor" exceptions and reporting requirements. As she concludes:
Even without these laws, the FTC has been successfully prosecuting allegedly anticompetitive behavior in the form of reverse payment settlements... To the case law and exemplary consent decree, the pending bills would essentially add a presumption that a reverse settlement payment is anticompetitive. However... the FTC has been able to prosecute unfair competition allegations even under circumstances where the companies involved asserted legitimate business reasons for the transaction. It seems that the proposed statutory presumption of anticompetitive effect would mostly serve to reduce the cost and scope of FTC investigations into reverse settlement payments. The pending legislation would not change the scope of the business transactions the FTC has indicated are potentially problematic, or the FTC’s ability to challenge proffered legitimate business interests that the FTC finds lacking in “economic sense”.