Antitrust Law Daily Wrap Up, ANTITRUST—D.N.J.: Revlimid buyers’ pay-for-delay antitrust claims survive drugmakers’ motion to dismiss, (Oct 5, 2026)

By Martin A. Steinberg, J.D.

Purchasers plausibly alleged that Celgene’s settlement with Natco delayed generic Revlimid entry and used volume restrictions to enable Natco to charge supracompetitive prices.

The federal court in Newark, New Jersey denied, in relevant part, the drugmakers’ motion to dismiss antitrust claims alleging that Celgene’s 2015 settlement with generic manufacturer Natco Pharma Ltd. constituted an unlawful “pay-for-delay” agreement involving Revlimid. The plaintiffs alleged that the settlement delayed Natco’s generic entry until 2022 and imposed escalating volume caps that allowed Natco to charge near-brand, supracompetitive prices while limiting broader generic competition. The court concluded that these alleged pricing benefits could constitute a noncash “payment,” that the alleged transfer of value was sufficiently large, and that the plaintiffs plausibly alleged the required elements of a pay-for-delay claim (In Re Revlimid & Thalomid Purchaser Antitrust Litigation, No. 2:19-cv-07532-MEF-ADS (D.N.J. Sept. 29, 2026)).

Background. Revlimid is a prescription cancer drug developed and sold by Celgene Corporation, which held the drug's principal patents. Bristol-Myers Squibb later acquired Celgene. While Celgene’s patents gave it exclusive control over Revlimid, several generic manufacturers sought to enter the market before the patents expired by challenging their validity or asserting that their products would not infringe them. Celgene responded with patent infringement litigation, and those disputes ultimately ended in settlements. The plaintiffs allege that the settlements were collusive arrangements that delayed meaningful generic competition, allowed Celgene to continue charging high prices for Revlimid, and enabled generic manufacturers to share in supracompetitive profits.

The plaintiffs include pharmacies, insurers, union health plans and trusts, and hospitals that either purchased Revlimid or paid for prescriptions on behalf of patients. They allege that they incurred higher costs because the settlements kept Revlimid prices artificially high. The defendants include Celgene, Bristol-Myers Squibb, and five generic drug manufacturers that entered into Revlimid-related settlements with Celgene. Although Celgene entered into ten settlements with generic manufacturers, the court’s opinion focuses principally on Celgene’s agreement with Natco Pharma.

Natco was the first generic manufacturer to challenge Celgene’s patents for certain Revlimid strengths. Celgene sued Natco for patent infringement in 2010, and the case was expected to be ready for trial in 2016. A successful challenge by Natco could have permitted it to launch generic Revlimid before Celgene’s patents expired. Instead, Celgene and Natco settled in 2015. Under the agreement, Natco generally could not begin selling generic Revlimid until March 2022, more than six years after the settlement. Even after entry, Natco’s sales were capped at 7% of historical Revlimid sales during the first year, 12% during the second, 20% during the third, and 27.5% thereafter until January 2026, when the restrictions ended.

The litigation began in 2019. After dismissal with leave to amend in June 2024, the plaintiffs filed five amended complaints focused on alleged pay-for-delay settlements and added allegations about protections against competing generic supply. The defendants again moved to dismiss; this opinion addresses their arguments concerning the Celgene–Natco settlement.

The court’s approach and the elements. For purposes of this motion, the court required plausible allegations of four elements: (1) delayed generic entry; (2) a payment, including a noncash transfer of value, from Celgene to Natco; (3) a sufficiently large payment; and (4) lack of justification for that payment. The defendants did not contest the sufficiency of the delay or lack-of-justification allegations. The court therefore concentrated on whether the pricing opportunity constituted payment and whether its value was sufficiently large.

Size. A reverse payment may be evaluated in absolute terms or against the litigation expenses saved through settlement. The plaintiffs alleged that Natco’s opportunity to charge elevated generic prices conveyed billions of dollars in additional value, far exceeding avoided litigation costs. Those allegations satisfied either measure. Precise valuation was unnecessary at the pleading stage.

Pay: higher per-unit prices. The court found plausible the allegation that Natco’s escalating sales caps would permit it to charge prices only modestly below Celgene’s branded Revlimid prices. With sales initially capped at 7% of historical Revlimid sales, Natco would have little incentive to make substantial price cuts because lower prices could not increase sales beyond its contractual allocation.

The court supported that reasoning with the dominant-firm economic model. Celgene would remain the dominant supplier and price leader, while Natco would serve a restricted fringe of the market and largely follow Celgene’s pricing. The caps would prevent Natco from expanding supply in response to high prices, plausibly preserving supracompetitive prices.

That pricing opportunity could constitute a noncash payment under FTC v. Actavis, Inc., 570 U.S. 136 (2013). It implicated the doctrine’s concern that settlements allow brand and generic manufacturers to share monopoly profits at consumers’ expense. The arrangement also imposed a meaningful cost on Celgene: surrendering monopoly-priced sales on part of a multibillion-dollar market. The court found support in King Drug Co. of Florence v. SmithKline Beecham Corp., 791 F.3d 388 (3d Cir. 2015), which recognized that a promise to forgo an authorized generic could constitute payment by protecting the settling generic’s profits.

The court rejected the argument that volume-limited entry necessarily conveyed less value than lawful unrestricted early entry. The complaint alleged that the protected pricing arrangement was more valuable to Natco. Moreover, the legality of an agreement permitting unrestricted entry did not establish the legality of an arrangement plausibly preserving high prices.

Pay: would the market structure stick? The pricing theory depended on other suppliers not flooding the market with generic Revlimid. The court found that premise plausible.

An authorized generic. Celgene had limited economic incentive to introduce a cheaper version of its own drug while retaining most branded sales at high prices. An acceleration provision further discouraged that step: launching an authorized generic would permit Natco to enter immediately without volume limits, threatening Celgene’s prices and market share.

Other drugmakers. Celgene likewise had incentives to preserve the arrangement when settling with later generic challengers. The agreement’s “1.5x” provision could require Celgene to increase Natco’s allocation to at least 1.5 times another settling generic’s allocation, making larger allocations more costly.

The defendants argued that numerous small settlements could collectively produce extensive generic competition. The court found that scenario too contingent to defeat the plaintiffs’ plausible allegations. Later filers also lacked Natco’s 180-day exclusivity incentive, reducing their incentive to fund litigation and their leverage to obtain favorable settlements. A qualifying patent victory by another manufacturer would additionally permit Natco’s immediate, uncapped entry.

The court rejected any requirement that Natco receive an express guarantee against competition. Plausibility, rather than certainty, governed; contractual incentives could affect third parties even without binding them.

Conclusion. The court denied the defendants’ motion to dismiss as to the arguments concerning the Celgene–Natco settlement addressed in this opinion, finding plausible allegations supporting each required element. It relied solely on circumstances and expectations at the time of settlement, leaving unresolved whether subsequent market developments could also be considered. The ruling allowed the claims to proceed; it did not establish antitrust liability.

The Case is No. 2:19-cv-07532-MEF-ADS.

Judge: Farbiarz, M.

Attorneys: Anthony Michael Christina (Lowey Dannenberg, P.C.) for Humana Inc. Daniel Rene Guadalupe (Pashman Stein Walder Hayden, PC) for Celgene Corporation.

Companies: Humana Inc.; Celgene Corporation

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