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Federal Trade Commission Chairman Jon Leibowitz issued the following statement regarding a key ruling issued today by a panel of the U.S. Court of Appeals for the Third Circuit regarding patent settlements between branded and generic manufacturers of the high blood pressure medication K-Dur 20:

“The Third Circuit Court of Appeals seems to have gotten it just right: These sweetheart deals are presumptively anticompetitive. As our Bureau of Economics has estimated, they cost American consumers $3.5 billion a year in higher health care costs. Restricting these arrangements, as many in Congress have proposed, would reduce federal government debt by $5 billion over 10 years, according the Congressional Budget Office. It’s time for the pharmaceutical companies to return to the side of consumers.”

The Appeals Court reversed the decision of a district court, which had dismissed a private lawsuit challenging the legality of the K-Dur patent settlements. In the ruling, the Appeals Court held that a reverse payment from a branded drug manufacturer to a generic competitor is “prima facie evidence of an unreasonable restraint of trade.”

The FTC filed an amicus brief last year urging the Third Circuit to reverse the district court’s K-Dur decision, arguing that the district court’s analysis conflicted with basic antitrust principles, as well as patent law and the policies of the Hatch-Waxman Act.

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