AuthorKenneth L. Dorsney
chapter 16
I. Overview of Antitrust Issues
The structure of the pharmaceutical industry almost invariably leads to
antitrust issues. Patent protection is strong. The patentee, prior to generic
entry, arguably has a monopoly at least as to that pharmaceutical product,
but possibly not as to a therapeutic category. The patent-based monopoly
can lead to large profits—sometimes more than a billion per year for
blockbuster drugs. When a generic product is introduced to the market,
the substitution for the patentee product is rapid, often above 90 percent
in the six months, and virtually guaranteed, given healthcare and insur-
ance policies.
Antitrust issues in Abbreviated New Drug Application (ANDA) cases
arise in the same two main ways as they did when the first edition of
this treatise was published: (1) settlements between the patentee and the
generic that are accused of being anticompetitive; and (2) accusations that
the patentee engaged in some form of anticompetitive behavior to keep
the generic out of the market, such as sham patent litigation or patent
litigation based on a fraudulently acquired patent. However, the Supreme
Court’s 2014 decision in FTC v. Actavis1 drastically altered the landscape,
because it turned a minority rule—allowing antitrust suits when parties
settle ANDA patent litigation—into the law of the land. Before Actavis,
only the Third U.S. Circuit Court of Appeals had allowed antitrust suits
following a settlement of patent litigation under the existing ANDA
regime, and the Sixth Circuit had allowed for the possibility of antitrust
claims under the old ANDA regime, in which a settlement could preclude
Asim M. Bhansali, Benedict Y. Hur, and Sharif E. Jacob, Keker & Van Nest LLP.
1. 570 U.S. ___, 133 S. Ct. 2223 (2014).
dor54588_16_ch16_377-404.indd 377 5/5/16 5:42 PM
generic entry altogether.2 Every other circuit court had held that no anti-
trust claim could arise from brand-generic patent litigation settlements.3
This chapter contains an overview of the legal theories in ANDA
antitrust cases (section1), and continues with a discussion of the Federal
Trade Commission (FTC) cases and private antitrust cases brought on
behalf of direct and indirect purchasers (section2); and concludes with a
discussion of remedies in these cases (section3).
II. Legal Theories in ANDA Antitrust Cases
Although the two primary theories underlying ANDA antitrust cases—
“pay for delay” conspiracy and unilateral exclusionary conduct—remain
the same, Actavis engendered a likely shift in focus from one kind of case
to the other. Before Actavis, the near absolute bar on claims arising from
an allegedly collusive settlement of brand-generic patent litigation meant
that most plaintiffs would focus their efforts on establishing a violation
based on the brand company’s unilateral conduct. But unilateral conduct
claims set a high bar, because plaintiffs either had to show that that brand
company brought sham litigation, or had to rely on novel product-hopping
theories. After Actavis, the availability of antitrust claims arising out of
brand-generic settlements is likely to shift plaintiffs’ focus away from the
more burdensome unilateral conduct claims to conspiracy claims arising
out of settlements.
From a statutory perspective, ANDA antitrust claims typically arise
from one of three sources. Unilateral conduct claims will rely on monopoli-
zation under federal law—section 2 of the Sherman Antitrust Act.4 Pay-for-
delay cases may assert both monopolization offenses under section 2 of the
Sherman Act—against the brand—and conspiracy offenses under section
1 of the Sherman Act5—against both the brand and the generic. (A pay-
for-delay agreement, also known as a reverse-payment settlement, is an
agreement between the patentee and the generic to settle patent litigation
in which the brand manufacturer, which brought the litigation, makes a
payment to the generic manufacturer in exchange for its agreement not to
bring its product to market for a period of time.) Finally, ANDA antitrust
2. In re K-Dur Antitrust Litig., 686 F.3d 197, 218 (Fed. Cir. 2012); In re Cardizem CD
Antitrust Litig., 332 F.3d 896, 900–01 (6th Cir. 2003).
3. In re Ciprofloxacin Hydrochloride Antitrust Litig., 544 F.3d 1323, 1332–37 (Fed. Cir.
2008); In re Tamoxifen Citrate Antitrust Litig., 466 F.3d 187, 212–13 (2d Cir. 2006); Valley
Drug Co. v. Geneva Pharms., 344 F.3d 1294, 1304 (11th Cir. 2003).
4. 15 U.S.C. § 2.
5. 15 U.S.C. § 1.
dor54588_16_ch16_377-404.indd 378 5/5/16 5:42 PM

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT