The Supreme Court yesterday declined to take a case that tested the legality of multi-million dollar settlements that are increasingly cropping up in the pharmaceutical industry between big branded drug companies and their generic rivals.

The decision marks a blow for the Federal Trade Commission, the antitrust regulator that has sharply criticised the so-called “reverse payment” settlements and – in a rare departure – had urged the court to take on the case over the objection of the US Justice Department, the other antitrust regulator.