Recent Rulings Highlight Risk To Japanese Drugmakers In Settling Pharmaceutical Litigations

• Published date: 28 October 2025
• Law Firm: Jenner & Block
• Author: Shaun Van Horn

In FTC v. Actavis, Inc., 570 U.S. 136 (2013), the US Supreme Court addressed the legality of "reverse payment" settlements in pharmaceutical patent litigation. A reverse payment occurs when a brand-name drug manufacturer pays a generic drug manufacturer to settle patent litigation and delay the generic's market entry, essentially paying the potential competitor not to compete. Since Actavis, pharmaceutical companies' settlements have become more complex, often finding ways to provide value to generic companies.

On May 13, 2024, the Second Circuit Court of Appeals affirmed a trial court's dismissal of the antitrust claims in a reverse payment case. Watson Labs., Inc. et al. v. Forest Labs., Inc. et al., 101 F. 4th 223 (2d Cir. 2024). Forest Laboratories, the brand manufacturer of Bystolic settled patent litigation with seven generic nebivolol manufacturers. As part of the settlements, Forest agreed to pay the defendants their saved legal expenses (up to $2 million) and...