In fiscal year 2021, drug companies filed 199 final patent settlements with the FTC. Twenty-two of them came with a second agreement signed within 30 days. [4] That second agreement is one place the FTC staff looks for hidden value. [5] The settlement itself usually looks plain: a licensed entry date, a release, and a dismissal. The supply contract, co-promotion deal, or distribution right signed next to it is what a regulator reads for hidden value.
This article follows the FTC’s own filings, three court and Commission decisions, and the staff’s January 2025 commentary. It adds calculations from the FTC’s published counts. It also states what I could not confirm. I found no public FTC announcement of an investigation into any company’s internal deal-making function, and this article does not claim one exists. It explains why the commercial terms around a settlement are the part the agency reads most closely.
The Short Answer
A patent settlement can break antitrust law when the brand company pays the generic company, in cash or in kind, to stay off the market. The Supreme Court said in 2013 that such deals get full rule-of-reason review. [11] Courts and the FTC have since treated non-cash value, such as a no-authorized-generic promise or an inflated service contract, as a payment. [5][9][7] Companies that sign a settlement and a business deal in the same month give the FTC a reason to compare the two.
The Five Findings That Matter
Finding 1: From FY2018 to FY2021, companies filed 843 final settlements. Only 6 (0.7%) had explicit compensation beyond litigation fees of $7 million or less. This is analysis based on FTC counts. [1][2][3][4]
Finding 2: Cash has mostly gone. The FTC count of settlements with an entry restriction and compensation beyond small litigation fees fell from 33 in FY2012 to 0 in FY2021. [4]
Finding 3: Side agreements are common. Across FY2019 to FY2021, 49 of 598 final settlements (8.2%) came with an additional agreement signed within 30 days. This is analysis based on FTC counts. [2][3][4]
Finding 4: Quantity limits on the generic grew. The FTC found 23 agreements covering 8 products from FY2018 to FY2021 that cap how much the settling generic may sell. [5]
Finding 5: In Impax v. FTC, the Fifth Circuit held that over $100 million of Endo’s payment remained unjustified, even after it credited a $10 million research agreement as payment for services. [8]
What I Could Not Confirm
The topic framing says the FTC is now investigating deal desks. I could not verify that. FTC investigations are often non-public, so the absence of an announcement proves little. What I can say is narrower. The FTC’s prescription drug page listed 20 of 350 results when I read it. The 2025 and 2026 entries on that page concerned Orange Book listings, pharmacy benefit managers, a merger remedy, and an amicus brief. None was a pay-for-delay case. [15] I did not page through the rest.
Two news summaries described a June 2025 FTC policy statement on pay-for-delay settlements. Both were short automated summaries with no link to an FTC document. I could not find the statement on ftc.gov, so I do not rely on it.
What Is a Reverse Payment, and What Did FTC v. Actavis Decide?
Definition: Reverse Payment
A reverse payment is value that flows from a brand manufacturer to a generic challenger inside a patent settlement. The word “reverse” is used because, in a normal infringement case, the money flows the other way. The generic agrees to delay entry. The brand gives something of value. The value can be cash, a license, a service contract, or a promise about competition.
The Holding of FTC v. Actavis (June 17, 2013)
The Court decided FTC v. Actavis, No. 12-416, on June 17, 2013, by a 5-3 vote. Justice Alito did not take part. Justice Breyer wrote for the majority. [11] The Court rejected the “scope of the patent” test and the FTC’s “quick look” test. It held that the rule of reason governs. [11] The FTC later described the decision as overturning the scope-of-the-patent test, which had largely shielded these settlements from antitrust review. [12]
The case concerned AndroGel. Solvay held the patent. Actavis and Paddock filed generic applications. [11] One law firm summary quotes the settlement as providing “$19-30 million annually, for nine years, to the third” generic partner. [13] The payments were described as compensation for promotion and manufacturing services. [11] The FTC argued that the services had little independent value. [11]
The Court said that “what the holder of a valid patent could do does not by itself answer the antitrust question.” [11] It said a large payment can be “a workable surrogate for a patent’s weakness.” [11] It also wrote that the first-filer 180-day exclusivity under Hatch-Waxman creates “special incentives for collusion.” [11]
The Payment Factors Courts Weigh
The Court named four considerations for judging whether a payment hurts competition. [11] Each one maps to a question a deal reviewer can ask before signing.
Size of the Payment
A larger payment makes it more likely that the brand has market power and is buying protection from competition. [11] The test is the amount of value, not the form. A royalty reduction, a distribution right, and a cash payment all carry a dollar value.
Scale Against Anticipated Litigation Costs
A payment close to the brand’s saved litigation costs is easier to defend. [11] The FTC’s yearly reports show that most explicit payments are of this kind. The average litigation-fee payment was $3.465 million in FY2019, $1.591 million in FY2020, and $3.082 million in FY2021. [2][3][4]
Independence From Other Services
If the payment is for real services, the brand may justify it. [11] In Actavis, the FTC argued the services had little independent value. [11] A co-promotion or development contract must pass the same test: would the brand buy the service on the same terms from a party that was not a litigation rival?
Lack of Any Other Convincing Justification
The last consideration is whether any other explanation fits the payment. The Impax Commission opinion turned on this point. The Commission found that Impax did not tie its claimed benefits to the restraint itself. [7]
What Is a Deal Desk, and Why Does It Matter in a Patent Settlement?
Definition: Deal Desk (Usage in This Article)
In this article, a deal desk is the internal group that prices, approves, and papers commercial agreements. At a drug company, it may sit in business development, alliance management, finance, or legal. It is not a legal term and no statute names it. I use it because the people who structure supply, license, and promotion deals are often not the people who negotiate the patent settlement.
Which Commercial Agreements Sit Near a Patent Settlement?
The cases below show four recurring types. Each has appeared in a reported FTC matter or court opinion.
Supply and Active Ingredient Agreements
The FTC’s 2008 complaint against Cephalon alleged that Cephalon paid generic makers mainly through business deals involving active pharmaceutical ingredients and intellectual property. The FTC argued those deals made no economic sense except as payments not to compete. [10]
Co-Promotion Agreements
In Loestrin 24, Warner Chilcott agreed to annual fees and a percentage of net sales for Watson’s co-promotion of Femring. [9] In Actavis, the payments were described as compensation for promotion services. [11]
Development and Research Agreements
In Impax, Endo agreed to pay for a Parkinson’s disease research collaboration. The Fifth Circuit referred to a $10 million research agreement. [8]
Distribution and Authorized Generic Rights
In FY2019, one settlement made the generic the exclusive distributor of the brand’s authorized generic, with a side deal to co-promote both products. [2] In FY2018, one first-filer settlement included a no-authorized-generic provision, and one non-first-filer settlement appointed an exclusive distributor. [1]
Why Timing Matters
Two rules tie the business deal to the settlement date. The first is a reporting rule. Since October 24, 2018, the MMA has required parties to file agreements entered into within 30 days of a reportable settlement. [2] The second is a remedy term. The FTC’s final order against Impax bars certain business transactions with the brand company within 45 days of a patent settlement. [7]
How Does the MMA Filing Rule Capture Side Deals?
What Must Be Filed Under the MMA
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires brand-name drug manufacturers and generic applicants to file certain agreements with the FTC and the Department of Justice. [6] The FTC publishes yearly reports on those filings. The reports for FY2004 through FY2021 were listed on the FTC’s page when I read it. [6]
The staff published the reports for FY2018 through FY2021 together on January 15, 2025. [5] That means the most recent public count is for fiscal year 2021, which ended September 30, 2021. A reader should treat every figure in this article as at least four years old. I did not find reports for FY2022 or later.
The October 2018 Amendment
The FTC said that on October 24, 2018, the MMA was amended to require filing of agreements entered into within 30 days of an MMA-subject agreement. FY2019 was the first year covered. [2] The staff began assessing these related agreements in FY2019. [5]
How Many Side Agreements Did the FTC Count?
Fiscal year
Final settlements
With an additional agreement within 30 days
Of those, with explicit compensation
Of those, with no compensation
Share of all settlements (calculated)
Source
FY2019
194
7
3
4
3.6%
[2]
FY2020
205
20
3
17
9.8%
[3]
FY2021
199
22
3
19
11.1%
[4]
Total
598
49
9
40
8.2%
Calculated
Analysis: The count of side agreements rose from 7 to 22 in two years. The count with explicit compensation stayed at 3 each year. Across the three years, 9 of 49 side agreements (18.4%) had explicit compensation and 40 (81.6%) had none. The FTC also flagged possible compensation in one side-agreement group in FY2019 and one in FY2021. Those counts overlap with the groups above, so I left them out of the table. [2][4]
What the FTC’s MMA Data Shows, FY2004 to FY2021
Methodology
I used the counts in Exhibit 1 of the FY2021 report and the text of the FY2018, FY2019, FY2020, and FY2021 reports. [1][2][3][4] I did not use any count from a secondary source in the calculations. The period is FY2004 to FY2021. A record counts if the FTC counted it as a final settlement of a patent dispute. I did not remove duplicates, because the FTC counts agreements, not products. The FTC reports a separate count of distinct branded products: 111 in FY2018, 104 in FY2019, 111 in FY2020, and 86 in FY2021. [1][2][3][4]
I calculated each share by dividing a count by the FTC’s total for the same year. I rounded to one decimal place. I label every derived figure as analysis.
Table 1: Final Settlements and Compensation, Selected Fiscal Years
Fiscal year
Final settlements
Restriction plus explicit compensation
Share (calculated)
Same, excluding settlements whose only compensation is litigation fees under $7 million
Share (calculated)
2004
14
0
0.0%
0
0.0%
2008
66
16
24.2%
15
22.7%
2012
140
40
28.6%
33
23.6%
2016
232
30
12.9%
1
0.4%
2017
226
20
8.8%
3
1.3%
2018
245
38
15.5%
2
0.8%
2019
194
24
12.4%
3
1.5%
2020
205
20
9.8%
1
0.5%
2021
199
33
16.6%
0
0.0%
Source: FTC FY2021 MMA report, Exhibit 1 [4]. Shares are calculated by the author.
What the Derived Numbers Show
Analysis: The share of settlements with an entry restriction and any explicit compensation peaked at 28.6% in FY2012 and stood at 16.6% in FY2021. The share with compensation beyond small litigation fees fell from 23.6% to 0.0% over the same span.
Analysis: From FY2018 to FY2021, 115 of 843 final settlements (13.6%) had an entry restriction plus explicit compensation. Of those 115, 6 (5.2%) had compensation beyond litigation fees under $7 million. The other 109 paid only litigation fees.
The FTC reports the fee ranges. In FY2019, fee payments ranged from $500,000 to $9 million, and two exceeded $7 million. [2] In FY2020, they ranged from $45,000 to $5 million. [3] In FY2021, they ranged from $100,000 to $7 million. [4]
“pharmaceutical companies filed 205 agreements constituting final resolution of patent disputes” (FTC, Agreements Filed with the Federal Trade Commission Under the MMA, Fiscal Year 2020, p. 1). [3]
Limits of the Data
The FTC reports do not decide whether any agreement is lawful. The staff said an agreement labeled “explicit compensation” may involve only small litigation-expense payments and is unlikely to raise concerns under Actavis. [5] The staff also said that assessing competitive harm requires facts about the specific market that MMA filings do not hold. [5]
The reports also contain internal count differences. The FY2021 text refers to 33 settlements in one place and “these 32” in another on the same page. [4] The FY2018 text refers to 38 settlements and “these 37.” [1] I used the Exhibit 1 totals and flag the differences here.
Which Settlement Terms Does the FTC Treat as Possible Compensation?
The FTC staff uses the label “possible compensation” for non-cash terms that could act as payment to a generic or biosimilar firm. The staff uses the label because the effect is uncertain without more investigation. [5]
The FTC’s List of Possible Compensation Terms
The January 2025 staff post gives six examples drawn from the MMA reports. [5]
The brand agrees not to use a third party to distribute an authorized generic for a period.
The generic gets a right of first refusal to act as the brand’s third-party distributor.
A declining royalty is eliminated or reduced if the brand launches an authorized generic.
Authorized generic supply goes to a non-first filer that may sell during the first filer’s exclusivity period.
Infringement damages from a prior at-risk launch are possibly reduced.
The generic receives a much earlier foreign license date than its U.S. date for the same product.
An Original Taxonomy: Four Types of Settlement-Adjacent Value
The following framework is my own. It is not an FTC or industry classification. It sorts the terms in the FTC reports and the cases below by how a reviewer would test them.
Type 1: Cash and Litigation Fees
This type is a direct payment. It is the easiest to value. The test is whether the amount is close to the brand’s saved litigation costs. In FY2021, all 33 explicit-compensation settlements with an entry restriction were of this kind. [4]
Type 2: Paid Services
This type is a supply, development, or promotion contract. The test is whether the price is one the brand would pay a stranger. Actavis, Cephalon, Impax, and Loestrin 24 all involved this type. [11][10][8][9]
Type 3: Market-Structure Commitments
This type is a promise about how the brand will compete. A no-authorized-generic commitment is the main example. The FTC stated in Impax that a no-AG commitment can be an in-kind payment that may harm competition. [5] The FTC reports do not give a separate count of explicit no-AG commitments. [3][4]
Type 4: Volume and Timing Terms
This type limits how much the generic can sell, or moves a date. The FTC counted 23 agreements covering 8 products with quantity limits from FY2018 to FY2021. [5] The staff said a small permitted quantity may give the generic little reason to cut prices, and a limit may work as a market allocation. [5]
Table 2: Possible Compensation by Fiscal Year
Fiscal year
Settlements with possible compensation
Quantity restrictions on the generic
Source
FY2018
14
7
[1]
FY2019
10
3
[2]
FY2020
3
2
[3]
FY2021
17
11
[4]
Total
44
23
Calculated
Analysis: Forty-four of 843 final settlements (5.2%) from FY2018 to FY2021 carried possible compensation. The FY2020 figure of 3 is my inference from the FTC’s component counts, and the report states that three final settlements were categorized as containing possible compensation. [3] The quantity-restriction total of 23 matches the FTC staff’s own count. [5]
Analysis: In FY2021, quantity restrictions made up 11 of the 17 settlements with possible compensation (64.7%). [4]
Case Study: Cephalon and Provigil
What the FTC Alleged
The FTC filed its complaint against Cephalon in 2008. It alleged that Cephalon sued four generic makers for patent infringement and then paid them over $300 million in total to drop their challenges and stay off the market until April 2012. The agreements were entered in late 2005 and early 2006. [10] Provigil treats excessive sleepiness. U.S. sales exceeded $1 billion in the year before generic entry. [10]
How the Money Moved
The FTC said Cephalon paid the generic makers mainly through business deals involving active pharmaceutical ingredients and intellectual property. The FTC argued these deals made no economic sense except as payments not to compete. [10]
The 2015 Resolution
On May 28, 2015, the FTC announced a settlement under which Teva, which had acquired Cephalon in 2012, would make $1.2 billion available to compensate purchasers who overpaid. Related private settlements may be credited against that sum. [10] Chairwoman Edith Ramirez said, “Requiring wrongdoers to give up their ill-gotten gains is an important deterrent.” [10]
Analysis: The $1.2 billion fund is up to about four times the “over $300 million” the FTC alleged in payments. Because the FTC gave a lower bound for the payments, the true ratio is at or below 4.0. The delay ran from the 2005 and 2006 agreements to April 2012, a span of roughly six years. [10]
Case Study: Impax, Endo and Opana ER
Facts of the Impax Settlement
The Impax matter concerned extended-release oxymorphone. Endo sold Opana ER. Impax planned a generic. The FTC alleged that the settlement entered in 2010 delayed generic entry until January 1, 2013, more than two years after Impax could have entered in mid-2010. [8]
Endo made two kinds of payment, according to the Commission. The first was a no-AG commitment. Endo promised not to launch an authorized generic during Impax’s 180-day Hatch-Waxman exclusivity period. [7] The second was a credit payable if the Opana ER market declined before Impax’s entry date. [7] The Fifth Circuit said that “[t]he $102 million Endo ultimately paid is likely a good approximation” of the expected value of the credits. [8] The court found the no-AG commitment increased Impax’s projected profits by $25.5 million. [8]
Analysis: The credits, at about $102 million, were four times the $25.5 million value of the no-AG commitment (102 divided by 25.5 is 4.0). The two figures come from the court’s findings, and I have not added them together because the court did not.
The Commission’s Decision (March 28, 2019)
The Commission voted 5-0 on March 28, 2019. Commissioner Noah Joshua Phillips wrote the opinion. The Commission reversed the Administrative Law Judge’s initial decision. [7] The Commission found that Endo had market power, that Impax received a large unjustified payment, and that Impax could have launched earlier. [7] It found that Impax did not show a procompetitive rationale tied to the restraint. In the alternative, it found a viable less restrictive alternative. [7]
The Fifth Circuit Decision (April 2021)
The Fifth Circuit affirmed the Commission’s decision in all respects. [8] The court said that, even assuming the collaboration was relevant and the $10 million research agreement was payment for services, “over $100 million of Endo’s payment remains unjustified.” [8] The court said the size of the payments was “comparable to other cases where courts have inferred anticompetitive effect.” [8] The case is reported at 994 F.3d 484. [8]
Analysis: The Fifth Circuit decision came 747 days after the Commission opinion, about two years. It came almost eight years after Actavis.
The 45-Day Business Transaction Term
The Commission’s final order does more than ban reverse payments. It bars Impax from any reverse payment that defers or restricts generic entry, including no-AG commitments. It also bars certain business transactions with the brand company within 45 days of a patent settlement. [7] The order does not affect existing agreements. [7] This term is the clearest regulatory link between a settlement date and a commercial calendar.
Case Study: In re Loestrin 24 Fe Antitrust Litigation
The Warner Chilcott and Watson Settlement
The First Circuit decided In re Loestrin 24 Fe Antitrust Litigation, Nos. 14-2071 and 15-1250, on February 22, 2016. [9] In January 2009, Watson agreed to delay its generic until the earliest of several triggers, the first being January 22, 2014. In return, Warner agreed to a no-AG commitment for Watson’s first 180 days, a royalty-free license from January 22, 2014, fees and a share of net sales for Watson’s co-promotion of Femring, and exclusive Generess Fe brand sales rights. [9]
The Warner Chilcott and Lupin Settlement
In October 2010, Lupin dropped its challenge to the ‘394 patent and agreed to delay entry until July 22, 2014. Warner agreed to a non-exclusive license for an authorized generic of Femcon Fe, a right for Lupin to buy and sell a generic Asacol 400mg supplied by Warner if another manufacturer launched one, and an undisclosed payment toward attorneys’ fees. [9]
What the Court Held on Non-Cash Payments
The court held that the district court erred by limiting Actavis to cash. It said, “the district court erred in determining that non-monetary reverse payments do not fall under Actavis’s scope.” [9] It quoted the Third Circuit’s King Drug decision: “We do not believe Actavis’s holding can be limited to reverse payments of cash.” [9]
The court did not decide whether the no-AG commitment or any single term was an unlawful reverse payment. It left that question to the district court in the first instance. [9] It also said plaintiffs need not give precise figures at the pleading stage. [9]
Four Cases Compared: Settlement, Side Deal, and Outcome
Matter
Drug
Settlement date
Side deal or in-kind value
Reported value
Outcome
Source
FTC v. Actavis
AndroGel
2006 (per summary)
Promotion and manufacturing service payments
$19-30 million per year for nine years (as quoted by one law firm)
Rule of reason applies; decided June 17, 2013
[11][13]
FTC v. Cephalon
Provigil
Late 2005 and early 2006
API and intellectual property business deals
Over $300 million alleged
$1.2 billion fund announced May 28, 2015
[10]
In re Loestrin 24 Fe
Loestrin 24 Fe
January 2009 and October 2010
No-AG, co-promotion, brand rights, licenses
Not stated in the opinion excerpt
Actavis covers non-cash payments; vacated and remanded Feb. 22, 2016
[9]
Impax v. FTC
Opana ER
2010
No-AG, credit payments, research agreement
About $102 million paid; no-AG worth $25.5 million
Commission 5-0 on Mar. 28, 2019; Fifth Circuit affirmed in April 2021
[7][8]
Where Does FTC Policy Stand in 2025 and 2026?
The January 2025 Staff Post
On January 15, 2025, FTC Bureau of Competition staff Brad Albert and Hannah Lamb published “Reverse Payments: From Cash to Quantity Restrictions and Other Possibilities.” The post accompanied four reports covering FY2018 through FY2021. [5] It said explicit cash payments apart from litigation expenses have become less common since Actavis, and that settlements have grown more complex. [5]
The post said staff will continue to scrutinize filings for possible compensation. It also said staff will investigate market conditions where appropriate and report trends in future MMA reports. [5] That is the closest public statement I found of how the staff reads settlement-adjacent terms.
The June 2024 Comment to the USPTO
On June 18, 2024, the FTC commented on a USPTO proposal. The proposal would require filing with the USPTO of settlements made before an America Invents Act proceeding starts. The FTC supported it and said it would close a loophole. [14] A law firm summary noted that the practical effect might be limited, because the FTC already receives some of these settlements under the MMA. [14]
Orange Book Actions Are a Separate Issue
On May 21, 2025, the FTC sent warning letters to Covis Pharma, Teva Branded Pharmaceutical Products R&D, and Azurity Pharmaceuticals about improper Orange Book patent listings. It also announced it was renewing its challenge to more than 200 listings. [15] On December 10, 2025, Teva asked the FDA to remove more than 200 improper listings from the Orange Book after an FTC challenge. [15]
Those actions concern what a brand lists, not what it pays a generic. They matter here for one reason. A weaker patent position raises the value of a delay, and so raises the antitrust weight of any payment that buys it.
What the 2025 and 2026 Public Record Does Not Show
The FTC gave oversight testimony to the Senate Commerce Committee on April 15, 2026. I read the first 100,000 of about 114,000 characters. The part I read covered the Express Scripts settlement of February 4, 2026, a pharmacy benefit manager case. It did not discuss pay-for-delay or MMA filings. [17] I did not read the last part.
What Happens If an Agreement Draws a Challenge? Scenario Analysis
The scenarios below use stated assumptions. They are hypothetical and do not describe any real company.
Scenario A: Cash Limited to Litigation Costs
Assume a brand pays a generic $3 million toward fees, and the generic’s litigation costs are about $3 million. The payment tracks saved costs, which is the first defense the Court recognized. [11] The FTC average in FY2021 was $3.082 million. [4] The agency’s own staff said such payments are unlikely to raise concerns under Actavis. [5]
Scenario B: Small Fee Plus a Large Service Contract
Assume the same $3 million fee, plus a promotion contract that pays the generic a fixed annual fee. A reviewer asks whether the brand would buy the promotion on those terms from an unrelated company. If not, the contract may be treated as a payment. This is the pattern in Actavis and Loestrin 24. [11][9] Under the Impax reasoning, a payment that exceeds any fair service value can stay “unjustified” even when part of it pays for real work. [8]
Scenario C: No Payment, But a No-AG Promise
Assume the settlement has no cash term, but the brand promises not to launch an authorized generic during the generic’s 180-day period. The Impax Commission treated such a promise as a payment. The court valued the promise at $25.5 million in extra projected profit for that generic. [7][8] The FTC reports do not count explicit no-AG promises separately. [3][4] A deal reviewer has to look for it.
Scenario D: A Supply Deal Signed 31 Days Later
Assume the settlement closes on day 0 and a supply contract closes on day 31. The MMA filing rule covers agreements entered into within 30 days. [2] The Impax order uses a 45-day window. [7] A contract signed on day 31 falls outside the filing rule. It does not fall outside antitrust law. The FTC staff said that assessing harm depends on facts about the market. [5] I did not find a source that treats a later date as a safe harbor, and I would not assume one exists.
What This Means for Brand Manufacturers
A brand company controls both sides of the paperwork. It should be able to show, for each commercial term near a settlement, a business reason that stands without the litigation. That standard follows from the Impax Commission’s finding that claimed benefits must link to the restraint itself. [7]
The no-AG commitment deserves its own review line. The Commission and the FTC staff both treat it as possible payment. [7][5] The FTC staff also lists a declining royalty that falls if the brand launches an authorized generic. [5] Both terms can be written in a way that hides them inside a license clause.
What This Means for Generic and Biosimilar Developers
The generic company receives the payment, and it can carry the legal consequences. The Commission’s order bound Impax, the generic. It bars Impax from agreements that include reverse payments and restricts business deals with the brand within 45 days of a settlement. [7]
First filers face a special risk. The Court wrote that 180-day exclusivity creates special incentives for collusion. [11] The FTC counted 94 first-filer settlements in FY2020 and 101 in FY2021. [3][4] In FY2021, 14 of the 101 had explicit compensation and a restriction. [4]
Biosimilar developers should note one limit. The FTC reports I read count filings under the 2003 statute. I did not verify how biosimilar settlements appear in those counts, so I make no claim about them.
How Do You Review a Settlement-Adjacent Deal? A Practical Checklist
The checklist below is my own synthesis. It turns the Actavis factors and the FTC’s possible-compensation list into questions.
List every agreement between the two parties signed within 30 days before or after the settlement. [2]
For each agreement, write the dollar value to each side over its full term.
Compare the value flowing to the generic with the brand’s saved litigation costs. [11]
Test each service price against an arm’s-length quote from an unrelated party. [11]
Search every license for a no-authorized-generic promise, a declining royalty, or an authorized-generic distribution right. [5]
Check for caps on the generic’s sales volume. [5]
Check for foreign license dates earlier than the U.S. date, and for damage reductions tied to a past at-risk launch. [5]
Record the business reason for each term in a memo that does not mention the litigation.
Where DrugPatentWatch Fits in This Analysis
DrugPatentWatch is a commercial patent intelligence service that tracks drug patents, exclusivity, and litigation. It can show a reviewer the Orange Book expiry date, the litigation history, and the settlement-derived entry date for a given product. The gap between the Orange Book date and the licensed entry date is the delay a regulator measures.
A DrugPatentWatch blog post published in September 2026 analyzes the same FTC settlement series. It reports a decline in payment-plus-restriction settlements and notes that acceleration clauses are common. [16] That post is a commercial publication, and its own figures contain internal inconsistencies. I did not rely on it. I used the FTC reports for every count in this article.
Key Takeaways
Actavis, decided June 17, 2013, holds that reverse payment settlements get rule-of-reason review. [11]
From FY2018 to FY2021, companies filed 843 final settlements, and 6 had explicit compensation beyond litigation fees under $7 million. This is a calculation from FTC counts. [1][2][3][4]
The FTC counted 49 side agreements entered within 30 days of a settlement across FY2019 to FY2021. [2][3][4]
The FTC staff treats no-AG promises, declining royalties, and quantity limits as possible compensation. [5]
The Fifth Circuit held in Impax that over $100 million of the brand’s payment was unjustified. [8]
The First Circuit held in Loestrin 24 that Actavis covers non-cash payments. [9]
The Impax order bars certain business deals with the brand within 45 days of a settlement. [7]
The newest public FTC count I found covers FY2021. [5][6]
I found no public FTC announcement of an investigation into a company’s deal-making function.
FAQ
Is a pay-for-delay settlement always illegal?
No. The Court rejected a rule that treats such settlements as presumptively unlawful and held that the rule of reason governs. [11]
Does a reverse payment have to be cash?
No. The First Circuit held that Actavis cannot be limited to cash. [9] The FTC staff also treats certain non-cash terms as possible compensation. [5]
What is a no-authorized-generic commitment?
It is a promise by the brand not to launch an authorized generic for a period. The Impax Commission held the promise could be a payment, and the Fifth Circuit found it raised Impax’s projected profits by $25.5 million. [7][8]
When must a related agreement be filed?
The MMA, as amended on October 24, 2018, requires filing of agreements entered into within 30 days of an MMA-subject agreement. [2]
How many patent settlements does the FTC receive each year?
The FTC counted 245 final settlements in FY2018, 194 in FY2019, 205 in FY2020, and 199 in FY2021. [1][2][3][4]
Are litigation-fee payments a problem?
The FTC staff said that payments limited to litigation expenses are unlikely to raise concerns under Actavis. [5] The reported fee averages were $3.465 million, $1.591 million, and $3.082 million in FY2019, FY2020, and FY2021. [2][3][4]
What did the Cephalon case cost the defendants?
The May 28, 2015 settlement made $1.2 billion available to compensate purchasers. [10]
Can a failure to file an agreement draw staff action?
The FTC page lists a May 10, 2011 staff finding that Sanofi-Aventis, Watson Pharmaceuticals, and Synthon Holding B.V. failed to report drug patent agreements. The FTC took no enforcement action. [6] I did not verify the statutory penalties.
Does the FTC publish MMA reports after FY2021?
I found none. The FTC page I read listed reports for FY2004 through FY2021, and the staff published FY2018 through FY2021 together in January 2025. [5][6]
Do Orange Book listing challenges relate to settlements?
They are a separate issue. The FTC challenged more than 200 listings in 2025, and Teva asked the FDA to remove more than 200 listings in December 2025. [15] The link is indirect: weaker patents raise the antitrust weight of any payment for delay.
References
Federal Trade Commission. (n.d.). Agreements filed with the Federal Trade Commission under the MMA: Fiscal year 2018 report. https://www.ftc.gov/system/files/ftc_gov/pdf/fy-2018-mma-report.pdf
Federal Trade Commission. (n.d.). Agreements filed with the Federal Trade Commission under the MMA: Fiscal year 2019 report. https://www.ftc.gov/system/files/ftc_gov/pdf/fy-2019-mma-report.pdf
Federal Trade Commission. (n.d.). Agreements filed with the Federal Trade Commission under the MMA: Fiscal year 2020 report. https://www.ftc.gov/system/files/ftc_gov/pdf/fy-2020-mma-report.pdf
Federal Trade Commission. (n.d.). Agreements filed with the Federal Trade Commission under the MMA: Fiscal year 2021 report. https://www.ftc.gov/system/files/ftc_gov/pdf/fy-2021-mma-report.pdf
Albert, B., & Lamb, H. (2025, January 15). Reverse payments: From cash to quantity restrictions and other possibilities. Competition Matters, Federal Trade Commission. https://www.ftc.gov/enforcement/competition-matters/2025/01/reverse-payments-cash-quantity-restrictions-other-possibilities
Federal Trade Commission. (n.d.). Pharmaceutical agreement filings. https://www.ftc.gov/advice-guidance/competition-guidance/industry-guidance/competition-health-care-marketplace/pharmaceutical-agreement-filings
Federal Trade Commission. (2019, March 29). FTC concludes Impax entered into illegal pay-for-delay agreement [Press release]. https://search.ftc.gov/news-events/news/press-releases/2019/03/ftc-concludes-impax-entered-illegal-pay-delay-agreement
Cleary Gottlieb Steen & Hamilton LLP. (2021, April 23). Fifth Circuit upholds FTC’s Impax decision in first fully litigated post-Actavis reverse payment decision. https://www.clearygottlieb.com/news-and-insights/publication-listing/fifth-circuit-upholds-ftcs-impax-decision
In re Loestrin 24 Fe Antitrust Litigation, Nos. 14-2071, 15-1250 (1st Cir. Feb. 22, 2016). https://www.ca1.uscourts.gov/sites/ca1/files/opnfiles/14-2071P-01A.pdf
Federal Trade Commission. (2015, May 28). FTC settlement of Cephalon pay-for-delay case ensures $1.2 billion in ill-gotten gains relinquished; refunds will go to purchasers affected by the anticompetitive scheme [Press release]. https://www.ftc.gov/news-events/news/press-releases/2015/05/ftc-settlement-cephalon-pay-delay-case-ensures-12-billion-ill-gotten-gains-relinquished-refunds-will
WilmerHale. (2013, June 18). FTC v. Actavis: Supreme Court adopts rule of reason for “reverse payment” settlements. https://www.wilmerhale.com/en/insights/client-alerts/ftc-v-actavis-supreme-court-adopts-rule-of-reason-for-reverse-payment-settlements
Federal Trade Commission. (2013, July 23). Prepared statement of the Federal Trade Commission before the Senate Committee on the Judiciary, Subcommittee on Antitrust, Competition Policy and Consumer Rights: Pay-for-delay deals (E. Ramirez). https://search.ftc.gov/sites/default/files/documents/public_statements/prepared-statement-federal-trade-commission-pay-delay-deals-limiting-competition-and-costing/130723payfordelay.pdf
Wilson Sonsini Goodrich & Rosati. (2013, June). FTC v. Actavis [Client alert]. https://www.wsgr.com/a/web/8SQH4XNjdVziW8wkkEPxWY/ftc-v-actavis.pdf
Freshfields. (2024). FTC comments on USPTO’s notice of proposed rulemaking involving patent settlement agreements. https://www.freshfields.com/en/our-thinking/blogs/a-fresh-take/ftc-comments-on-usptos-notice-of-proposed-rulemaking-involving-patent-settlement-102jazo
Federal Trade Commission. (n.d.). Prescription drugs [News and actions listing, 2025-2026 entries]. https://www.ftc.gov/industry/health-care/prescription-drugs
DrugPatentWatch. (2026, September). We pulled 18 years of FTC settlement data on ANDA litigation. Verdicts are the exception. https://www.drugpatentwatch.com/blog/we-pulled-18-years-of-ftc-settlement-data-on-anda-litigation-verdicts-are-the-exception/
Federal Trade Commission. (2026, April 15). Testimony of the Federal Trade Commission before the Senate Committee on Commerce, Science, and Transportation. https://www.ftc.gov/system/files/ftc_gov/pdf/p994811-ftc-oversight-testimony-senate-commerce-committee-2026.pdf
