Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC proposes to file amicus brief urging application of antitrust analysis to “no-authorized-generic” pharmaceutical patent settlements, (Aug 16, 2013)
Organizations Mentioned:Pfizer | Teva | Teva Pharmaceuticals | Wyeth, Inc.
By Tobias J. Gillett, J.D., LL.M.
The FTC filed a motion in the U.S. District Court for the District of New Jersey on August 14, requesting the court to grant it permission to file an amicus brief in the case of In re Effexor XR Antitrust Litigation. The brief contends that the antitrust analysis the U.S. Supreme Court required in FTC v. Actavis, Inc. for reverse-payment patent settlements should apply to an agreement not to market an authorized generic version of a drug for a specified period of time, even though the agreement did not involve a cash payment.
An “authorized generic” is a version of a brand-name drug that is chemically identical to the brand-name drug, but is marketed by the brand-name company as a generic product under the same regulatory approval granted to the brand name drug. Under a “no-authorized-generic” commitment, a brand-name company agrees not to market an authorized generic version of a drug for a specified period after the first generic company begins to market its version of the drug. Similarly, a reverse-payment settlement involves a brand-name manufacturer agreeing to pay a potential generic competitor in return for the generic company agreeing to abandon a patent challenge and to abstain from selling a generic version for a specified period of time.
In FTC v. Actavis, Inc. (2013-1 Trade Cases ¶78,432), the Supreme Court held that reverse-payment settlements must be subjected to antitrust scrutiny under the traditional antitrust factors. In In re Effexor XR Antitrust Litigation, the plaintiffs challenged a patent settlement agreement between pharmaceutical manufacturers Wyeth, Inc., now a subsidiary of Pfizer, Inc., and Teva Pharmaceuticals in which Wyeth allegedly agreed not to market an authorized generic version of its Effexor XR antidepressant for a specified period, in exchange for Teva’s agreement not to introduce its own generic version until July 1, 2010. To avoid antitrust scrutiny under Actavis, the defendants contended that the agreement at issue did not involve a payment, and therefore Actavis’s analysis did not apply.
According to the FTC’s brief, the case presents the issue whether pharmaceutical patent settlements are “immune from antitrust scrutiny so long as the brand-name drug manufacturer pays for delayed entry with something other than cash.” The FTC asserts that the Actavis decision refers to “payments” and “money” because the case before the Court involved claims of cash payments, but that “accepting the defendants’ claim of immunity whenever patentees use vehicles other than cash to share the profits from an agreement to avoid competition elevates form over substance, and would allow drug companies to easily circumvent the ruling in Actavis, at great cost to consumers.”
The Commission approved the filing of the amicus brief by a vote of 4-0. The agency expects a ruling on its request to participate as amicus by mid-September.
Companies: Wyeth, Inc.; Teva Pharmaceuticals
News: Antitrust FederalTradeCommissionNews