Full article reprinted from "The Pink Sheet" June 30, 2009
Lawyers are wary that the Federal Trade Commission may take a more aggressive stance toward pharmaceutical industry practices in the Obama administration. Read more...
Full article reprinted from "The Pink Sheet" June 30, 2009
During a June 18 webinar on the Obama administration's impact on antitrust enforcement in the life sciences industry, Hogan & Hartson partner Eric Stock suggested that one area the FTC may decide to pursue is product switching. While companies and states have brought complaints against companies over their switching campaigns - in which they seek to replace an old product going off patent with a new formulation - FTC has never done so.
Last year states filed an antitrust suit against Abbott and its marketing partner Fournier, claiming they illegally blocked competition for TriCor (fenofibrate) by making minor changes in the drug's formulation and filing baseless patent suits. Teva and Impax filed a similar suit against Abbott in 2006. And in 2005 the FTC launched an investigation of Abbott and Fournier to determine if they had restricted generic competition for TriCor, but has so far not pursued legal action.
A Challenge To Franchise Products
In another case a group of drug retailers led by Walgreens brought an antitrust suit against AstraZeneca over its efforts to switch the market from its Prilosec (omeprazole) to its nearly identical heartburn drug Nexium (esomeprazole) as Prilosec's patent was about to expire. A district court dismissed the suit last year.
Stock said the FTC may be more likely to challenge product switching where there is an allegation that there is no therapeutic reason for the change and a company is withdrawing the prior product from the market.
"I don't want to imply companies have an obligation to continue marketing outdated products," Stock said. But doing so "will provide a basis for early dismissal of litigation."
A Broader Enforcement Switch
The Obama administration has indicated that it would be tougher in antitrust enforcement than the Bush regime. And the FTC showed recently that it would be aggressive in review of mergers in the life sciences industry. In May the commission filed a complaint to block CSL's acquisition of Talecris Biotherapeutics, which would have created the largest maker of blood plasma products, and as a result CSL dropped the deal.
FTC's top priority in the life sciences area remains reverse settlements, in which a brand name manufacturer resolves a patent infringement suit by paying a generic manufacturer to delay launching its product. On June 23, FTC Chairman Jon Leibowitz announced results of an internal analysis that found ending such deals would save consumers $3.5 billion annually.
The FTC has been largely unsuccessful in pursuing such cases in the courts. Stock said litigation may force the agency to pursue a middle ground. "Rather than presenting no evidence on the merits of the underlying patent infringement case, the FTC may argue that it should prevail if it can show that the patent holder was likely to have lost the infringement case if the parties had not settled," he said.
- Brenda Sandburg
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