Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC weighs in on disposal of Nexium reverse-payment suit, (Feb 16, 2016)

By Greg Hammond, J.D.

The federal district court in Boston erred in determining that a jury found a challenged reverse payment agreement for AstraZeneca LP’s heartburn medication Nexium unreasonably anticompetitive under a rule of reason standard, but that purchasers of the drug failed to establish they suffered an injury, according to an FTC amicus brief filed in the U.S. Court of Appeals in Boston (In re Nexium Esomeprazole Antitrust Litigation, Case Nos. 15-2005, 15-2006, and 15-2007).

Under the alleged reverse payment agreement, AstraZeneca dropped a lawsuit against Ranbaxy in exchange for Ranbaxy’s agreement (1) to admit that certain of AstraZeneca’s Nexium-related patents were enforceable and valid; (2) to admit that Ranbaxy’s generic Nexium would infringe these patents; and (3) to delay launching a generic version of Nexium until May 27, 2014.

The district court concluded that the jury had found that the challenged reverse payment agreement was “unreasonably anticompetitive under a rule of reason standard,” according to the FTC’s brief. Nevertheless, the court held that the purchaser plaintiffs failed to establish an antitrust violation because the jury “was not persuaded” that the parties would have agreed to an earlier entry date but for the reverse payment.

The FTC claims that the district court erroneously ruled that the plaintiffs failed to establish that they suffered an injury and therefore failed to establish an antitrust violation. In particular, the Commission argues that the district court mistakenly conflated two distinct analyses: (1) the existence of an antitrust violation, which requires a general showing of harm to the competitive process and (2) the question of antitrust standing, which requires a specific showing by a private plaintiff that it suffered an injury-in-fact caused by the violation.

“This distinction is especially important in the context of reverse-payment agreements, which, as the Supreme Court has explained, harm the competitive process by removing the risk of potential but uncertain competition,” the FTC claims. “That harm occurs regardless of whether a specific purchaser ultimately proves that it suffered injury-in-fact.”

Companies: American Sales Company, LLC; Value Drug Company; Humana HealthAmerica Local 345 Health Care Fund; AstraZeneca LP; AstraZeneca AB; Aktiebolaget Hassle; Ranbaxy Pharmaceuticals Inc.; Ranbaxy Inc.; Ranbaxy Laboratories Ltd.; Walgreen Co.; Kroger Co.; Safeway Inc.; Supervalu, Inc.

News: Antitrust FederalTradeCommissionNews