Two years after the U.S. Supreme Court's landmark decision in Federal Trade Commission v. Actavis erected a roadblock against pharmaceutical firms paying competitors to delay bringing generics to market, appeals courts are extending it beyond cash deals.

“What we're seeing is an explosion of litigation in the aftermath of Actavis,” says Scott Hemphill, a New York University School of Law professor who studies competition in the pharma industry. “Actavis set the table for lower courts, and lower courts are now scrambling to fill in all the details.”

The high court held that government agencies and private parties could challenge “pay-for-delay” settlements between generic and brand-name drug companies. These deals, also known as reverse-payment settlements, involve inducements by brand-name drug companies to generic manufacturers to keep out of the market. They generally come in the form of settlements of brand companies' patent lawsuits against generic drug makers seeking market entry.