Brattle Principals Lisa Cameron and Steven Herscovici recently assisted in preparing an amicus brief in support of defendants-appellants Warner Chilcott Company, LLC in In Re: Loestrin 24 FE Antitrust Litigation, an antitrust case that is currently before the United States Court of Appeals for the First Circuit. In their work on this brief, Drs. Cameron and Herscovici supported attorneys Burt Rublin, Stephen Kastenberg, Jessica Anthony, and Barbara Schwartz at Ballard Spahr.
In the brief, the amici curiae provide economic analysis that is relevant to an assessment of how the provisions of a so-called reverse payment settlement should be treated under the antitrust laws. While the Court has been extensively briefed on many reasons that not all reverse payment settlements deserve antitrust scrutiny under Actavis, this amicus brief focuses on two important aspects of the Loestrin settlement that have received less attention:
(1) Indirect Purchaser Plaintiffs-Appellants (IPP-Appellants) challenge an acceleration provision of the settlement between Warner Chilcott and Watson as an improper reverse payment. As explained in the brief, acceleration provisions facilitate settlement and are therefore routine in settlement agreements when multiple generic firms seek entry. Further, they are pro-competitive, permitting generic entry before the date of patent expiration while reducing the societal costs associated with litigation.
(2) Amici for plaintiffs propose that even a settlement that reflects a fair value exchange of goods or services should be suspect from an antitrust perspective. However, as discussed in the brief, this view is economically unsound. Moreover, the exchange of fair value facilitates settlements and their pro-competitive impacts.
The full brief may be viewed below.