Different types of value transfer in ‘reverse payment’ settlement agreements

16.02.2018

In recent years, competition authorities and courts in the EU and the US have paid significant attention to patent settlement and similar agreements in the pharmaceutical sector – and particularly those in which the originator company makes a ‘reverse payment’ to the generic company in return for the generic’s promise to stay off the market for a period of time.

Agreements of this kind are often referred to as ‘pay-for-delay’ settlements. Not all of these cases involve cash payments. In many cases of this kind, careful consideration has been given to whether there is ‘transfer of value’ from the originator to the generic that induces the generic to cease or defer its efforts to enter the market independently. Recent cases have shown that other forms of consideration are not immune from competition law scrutiny.

Click here to view our summary the different forms of value transfer that competition authorities and courts in the EU and the US have considered in a ‘pay-for-delay’ context.

Sophie Lawrance

Author

Edwin Bond

Author