A federal appeals court on Monday revived Teva Pharmaceuticals' lawsuit alleging Eli Lilly violated a settlement governing the timing of a generic Forteo product's launch. The 7th U.S. Circuit Court of Appeals in Chicago reversed an earlier ruling that had dismissed Teva's claim, finding unresolved factual issues about when the settlement agreement expired.
The appeals panel concluded that the settlement's language and the allegations laid out in Teva's complaint do not permit a resolution in Lilly's favor as a matter of law. The decision means Teva's challenge will proceed in U.S. District Court in Indiana rather than being ended by the lower court.
Background of the dispute traces to 2016, when Lilly filed suit against Teva, contending that Teva's proposed generic version of Forteo infringed Lilly-held patents. In 2018 the parties reached a settlement that allowed Teva to bring its generic to market as early as 2019 - specifically one week before certain Lilly patents were scheduled to expire.
Afterwards, in 2020, the Food and Drug Administration granted Lilly an additional three years of exclusivity for Forteo. Teva nonetheless launched its generic version in December 2023. Teva then filed its own lawsuit in 2024, asserting that the FDA-granted exclusivity period unlawfully delayed the generic launch and thereby breached the 2018 settlement agreement.
U.S. District Judge Matthew Brookman dismissed Teva's complaint last year, reasoning that the settlement was no longer in effect once Lilly's patents had expired. The 7th Circuit's three-judge panel disagreed with that conclusion and has remanded the case to the Indiana federal court for further proceedings to resolve the factual disputes.
Representatives for both companies did not immediately respond to requests for comment. The appeals court docket identifies the matter as Teva Pharmaceuticals USA Inc v. Eli Lilly & Co, 7th U.S. Circuit Court of Appeals, No. 25-2125.
Impacted sectors - The ruling directly affects the pharmaceutical sector, particularly companies involved in branded and generic drug markets, and has implications for legal and regulatory activity connected to FDA exclusivity decisions.
Next procedural steps - With the case sent back to the district court, further litigation will address the timing and effect of the settlement and whether Lilly's extended exclusivity contravened the parties' agreement.