Federal judge allows Nexium reverse payment patent settlement suit to proceed

Last week, a federal judge in Massachusetts largely denied a series of motions seeking dismissal of various ‘pay-for-delay’ claims brought by direct and indirect purchasers involving AstraZeneca’s acid reflux drug Nexium. Although certain federal and state claims were trimmed on statute of limitation grounds, US district judge William Young let stand the core claims of the suit based on the alleged continuing harm flowing from the agreements.

This ruling comes just months after the Supreme Court’s long-awaited decision in FTC v Actavis and is one of the first times a court has applied the rule of reason analysis as articulated by the court. Significantly, in his ruling Young adopted a view strongly urged by the FTC that so-called ‘No-AG’ provisions can be viewed as ‘reverse payments’.

The agreements at issue settled patent litigation filed by AstraZeneca in November 2005 after Ranbaxy notified AstraZeneca that it intended to market generic versions of Nexium. As part of its Abbreviated New Drug Application (ANDA), Ranbaxy included a so-called ‘Paragraph IV’ certification that the commercial manufacture, use and/or sale of any generic Nexium product would not infringe any of AstraZeneca’s valid patents. The Ranbaxy ANDA filing was followed soon after by ANDA filings by Teva and Dr Reddy’s and additional patent suits filed by AstraZeneca against each…

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