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Third Circuit Holds that “Reverse Settlement” Payments Are Prima Facie Evidence of an Antitrust Violation, Widening Circuit Split

July 19, 2012 Read the memo

The Federal Trade Commission and class action plaintiffs achieved a significant victory this week in their ongoing effort to invalidate "reverse settlement" payments among manufacturers of branded and generic pharmaceuticals. On July 16, 2012, the U.S. Court of Appeals for the Third Circuit -- in In re K-Dur Antitrust Litigation -- adopted the position, long promoted by the FTC, that reverse settlement payments constitute prima facie evidence of an unreasonable restraint of trade, in violation of the federal antitrust laws. In so ruling, the court rejected the recent decisions of three other federal courts of appeals, widening an existing circuit split and increasing the likelihood that this issue will reach the U.S. Supreme Court.

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