Avoiding Antitrust Issues - - BioPharm International


Avoiding Antitrust Issues

BioPharm International
Volume 1, Issue 8

In 2002, the FTC alleged that Biovail Corporation and Elan Corporation had entered into an agreement to split the market for the sales of 30 mg and 60 mg generic Adalat, a prescription drug used to treat hypertension.31 The FTC asserted that Elan had obtained a monopoly over the 30 mg generic Adalat, and that Biovail had obtained one over the 60 mg product. The FTC added that through a series of distribution agreements, the companies avoided direct competition and split their profits. The FTC complaint charged that the agreement resulted in consumers and others having "to pay artificially high prices for generic Adalat products." 31(27) In recent remarks on the subject of the Federal Trade Commission v Perrigo Co. and Alpharma Inc.,32 FTC Chairman Deborah Platt Majoras noted that the FTC had attacked an alleged "conspiracy between Alpharma, Inc. and Perrigo Company to limit competition for over-the-counter store-brand children's liquid Ibuprofen." Chairman Majoras also stated, "Perrigo and Alpharma had signed an agreement allocating to Perrigo the sale of the product for seven years. In exchange for agreeing not to compete, Alpharma received an up-front payment and a royalty on Perrigo's sales of children's liquid Ibuprofen. Perrigo then, not surprisingly, raised prices."33

Because the stakes are so high, any potential non-competition agreement between biopharm companies must be reviewed carefully by antitrust counsel.

Pharmaceutical Patent Settlement Agreements
Payments by brand pharmaceutical patent holders to generic companies to settle patent litigation have garnered intense antitrust regulatory scrutiny and spawned substantial antitrust litigation in recent years. A generic abbreviated new drug application (ANDA) holder may note its intention to market a generic product prior to the expiration of a patented new drug application (NDA) drug by certifying to FDA that a patent or patents listed by a brand manufacturer in FDA's Orange Book are either invalid or not infringed by the generic version. The generic company also must notify the holder of the approved NDA, and the owner of the patent, of the filing of the ANDA. Generally, a patent infringement suit will then be filed against the ANDA filer within 45 days to prevent the FDA review and approval process from proceeding. Such a suit automatically stays FDA approval of the ANDA until the patent expires, a court determines that the patent is invalid, or 30 months pass.

According to the FTC, under the Hatch-Waxman Act, "the first applicant to submit an ANDA with a Paragraph IV Certification for a generic version of a brand name drug is entitled to a 180-day period of marketing exclusivity before the FDA may grant final approval of any other generic manufacturer's ANDA regarding the same brand name drug. This period does not begin to run until either the generic drug is commercially marketed or a court enters final judgment that the patents subject to the Paragraph IV Certification are invalid or not infringed." 34, 35(8-9) The complaints accompanying several FTC consent decrees have charged that such settlements effectively allocated markets and injured competition "by preventing or discouraging the entry of competition in the form of generic versions of [pharmaceuticals] into the relevant market[s]."35(34), 36 For example, in May 2000, the FTC charged that Abbott Laboratories paid Geneva Pharmaceuticals $4.5 million per month to delay bringing to market a generic alternative to Abbott's brand-name hypertension and prostate drug Hytrin. The companies entered into a consent decree with the Commission. 35

blog comments powered by Disqus



Bristol-Myers Squibb and Five Prime Therapeutics Collaborate on Development of Immunomodulator
November 26, 2014
Merck Enters into Licensing Agreement with NewLink for Investigational Ebola Vaccine
November 25, 2014
FDA Extends Review of Novartis' Investigational Compound for Multiple Myeloma
November 25, 2014
AstraZeneca Expands Biologics Manufacturing in Maryland
November 25, 2014
GSK Leads Big Pharma in Making Its Medicines Accessible
November 24, 2014
Author Guidelines
Source: BioPharm International,
Click here