On 16 July 2012, a U.S. appeals court issued a decision holding that pharmaceutical patent settlements that restrict generic entry and contain a payment to the generic company are presumptively unlawful under the U.S. antitrust laws.  The decision is a major victory for the U.S. Federal Trade Commission’s view of pharmaceutical patent settlements with so-called “reverse payments,” and dramatically alters the U.S. legal landscape in the U.S. with respect to such settlements.  Additionally, by holding that a patent settlement can violate the antitrust laws without proof that it affected competition outside the scope of a valid patent, the decision creates a direct conflict with the holdings [...]

The U.S. Federal Trade Commission has recently released two reports relating to the pharmaceutical industry. A significant theme in both reports is a concern that brand name pharmaceutical companies are using the threat of launching an authorized generic to make deals that delay generic entry. These reports shine a spotlight on the interplay between authorized generics and pharmaceutical patent settlements, and indicate strong FTC opposition to a practice that has never been found unlawful.

Report on Authorized Generics

On August 31, the FTC issued its final report analyzing the competitive significance of authorized generics. In the U.S., generic pharmaceutical products are typically sold b [...]

Public discussion on merger control in the last few years of has put the spotlight on two elements of contemporary merger analysis: market definition and market concentration, of which the former has raised considerable debate, in particular. It has been asked if market definition has de facto become superfluous to merger analysis due to some modern developments in merger assessment techniques, and if not, has its role still changed? Along with this debate, a more intense discussion on the role of market concentration in merger analysis has been revived. By somewhat generalizing, overall the discussion has made us face the question: are the days of traditional structural assumption really ov [...]

The U.S. Federal Trade Commission (“FTC”) has issued a report analyzing the U.S. patent system from a competition policy perspective. The FTC recognizes that, like the competitive process fostered by competition law, the right to exclude provided by the intellectual property laws is intended to promote innovation and thereby benefit consumers. The FTC believes, however, that several aspects of the U.S. patent system could be improved to better achieve these goals. In particular, the FTC focuses on several situations where the patent system may provide certain patentees – especially what the FTC refers to as “patent assertion entities” (i.e., “patent trolls”) – legal remedies [...]

The U.S. Department of Justice (DOJ) is seeking to curb the use of so-called “most favored nation”  (MFN) agreements — a common business practice that the DOJ believes can sometimes result in anticompetitive effects when entered into by a dominant firm.  In October of last year, the DOJ commenced an action against Blue Cross Blue Shield of Michigan (BCBSM), a health insurance company, for entering into a series of MFN agreements with hospitals.  The DOJ alleges that the MFN agreements had the effect of limiting competition and protecting the market position of BCBSM.

In the health care context, a MFN provision typically means that a health care provider has agreed with a health insurer th [...]

In August 2010, the U.S. antitrust agencies released the final version of their revised Horizontal Merger Guidelines, which they use to analyze the competitive implications of mergers between competitors. Whereas the prior (1992) version of the Guidelines had sought to provide a precise, step by step framework for analyzing horizontal mergers — centered around defining a “relevant market” and measuring market concentration — the new Guidelines embody a much more flexible approach. The new Guidelines place less emphasis on market definition and can be likened to a “tool box” of techniques for analyzing the competitive implications of horizontal mergers. The new analytical approach has imp [...]