Former Clinton Deputy Solicitor General sheds light on flaws in Federal Trade
Commission's case in FTC v. Actavis Inc.
WASHINGTON, March 25, 2013
New White Paper from Paul Bender questions parallel legislative efforts in the
WASHINGTON, March 25, 2013 /PRNewswire-USNewswire/ -- On the day the U.S.
Supreme Court hears oral arguments in FTC v. Actavis, a case that challenges
the rights of brand-name and generic drug manufacturers to settle patent
litigation out of court, Paul Bender, who served as Principal Deputy Solicitor
General under President Bill Clinton, has released a new white paper on the
topic. Bender, currently professor of law and Dean Emeritus of the University
of Arizona Law School, wrote the paper with colleagues Christopher A. Mohr and
Michael R. Klipper. Entitled, "Inappropriate Interference With the Fundamental
Right to Settle Litigation," the paper identifies a number of ways that the
law supports the right of companies to include considerations in the
settlement of these cases.
"There is no one more qualified to comment on these matters than Paul Bender,"
said Ralph G. Neas, President and CEO of the Generic Pharmaceutical
Association. "From the time that he clerked for Judge Learned Hand and then
for Justice Felix Frankfurter until today, Paul has had a deep understanding
of constitutional law. That, coupled with his decades of experience with the
impact that policy can have on citizens, is what makes his analysis so
salient. Bender's paper confirms that not only should the court uphold the
fundamental right of companies to include consideration in settling these
cases, but that Congress should, too."
The white paper examines legislation currently before the Senate, S.214, that
raises many of the same issues as the case facing the Court today. The bill
seeks to restrict the right of brand and generic pharmaceutical companies to
settle out of court. Bender finds the premise of the law— and the FTC case—
"hopelessly flawed," due to interfering with litigant rights to settle, unfair
burdens of proof, conflict with the statutory presumption of patent validity,
frustration of the pro-litigation provisions of Hatch-Waxman, and precluding
Specifically, Bender's paper takes aim at the idea that settlements are
anti-competitive, stating instead that the patent is by design an
anti-competitive legal measure to protect intellectual property. The paper
states that "By addressing the presence of consideration in patent settlements
entirely from the perspective of whether or not competition is increased, S.
214 ignores the fact that patents are themselves 'anti-competitive': the
inventor has a monopoly in the inventions as a reward for innovation. That is
why courts have generally held patent licenses immune from antitrust review."
He goes on to recommend that the Government use its current statutory
authority to ensure that settlements are in the interest of consumers. In
discussing the FTC's preferred solution of the presumptive prohibition of
consideration, Bender says, "Rather than adopting that unusual and dangerous
solution, the government should utilize the tools it has in hand under the
Medicare Modernization Act of 2003 that require the FTC to review and prove
the illegality of settlements on a case-by-case basis."
Neas said the paper represents a primer for those interested in learning more
about patent settlements. "We firmly believe the Court will rule favorably for
our position, as have three of four circuit courts of appeal, because patent
settlements allow the introduction of the generic drug before brand patents
expire. Further, they save the federal government and consumers billions of
dollars annually. This new paper provides a useful roadmap for legislators,
addressing point-by-point why interfering with this legal right is the wrong
thing to do."
White paper: S. 214's Inappropriate Interference With the Fundamental Right to
Patent Settlements Fact Sheet
Summary of GPhA Amicus in FTC v. Actavis
GPhA represents the manufacturers and distributors of finished generic
pharmaceuticals, manufacturers and distributors of bulk pharmaceutical
chemicals, and suppliers of other goods and services to the generic industry.
Generic pharmaceuticals fill 80 percent of the prescriptions dispensed in the
U.S. but consume just 27 percent of the total drug spending. Additional
information is available at gphaonline.org.
CONTACT: Claire Sheahan
SOURCE Generic Pharmaceutical Association
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