Law Commons^™

The Necessity In Antitrust Law, Gregory Day

Washington and Lee Law Review

Antitrust rarely, if ever, gives primacy to a dispute’s subject matter. For instance, exclusionary conduct that raises the price of a lifesaving drug receives the same analysis as a restraint of baseball cards. Since antitrust’s purpose is to promote consumer welfare, the equal treatment of important and mundane goods might appear perplexing. After all, competition to produce affordable foods, medicines, and other necessities would seem to foster consumer welfare more than inane products do.

In fact, defendants generally win antitrust lawsuits even when monopolizing necessities because the primary method of antitrust review is notably deferential to defendants. To explain this …

Tribal Sovereign Immunity As A Defense At The Patent Trial And Appeal Board? Or A Violation Of U.S. Antitrust Laws?, Samantha Roth

Marquette Intellectual Property Law Review

This Comment will address two primary issues. First, it will analyze the basis of sovereign immunity rights of tribes, with a focus on the relationship between intellectual property rights and sovereignty. Second, it will discuss whether this arrangement violates the antitrust laws of the United States. This Comment concludes that even if a claim of tribal sovereign immunity is legitimate, it is likely that such an arrangement still violates the relevant antitrust claims.

Update On Antitrust And Pay-For-Delay: Evaluating “No Authorized Generic” And “Exclusive License” Provisions In Hatch-Waxman Settlements, Saami Zain

San Diego Law Review

In Federal Trade Commission v. Actavis, the United States Supreme Court held that a patent litigation settlement where a branded drug company pays a generic drug company to end the litigation and delay launching its generic may violate the antitrust laws. Although the decision ended years of controversy over whether such settlements were subject to antitrust scrutiny, many issues remain unresolved concerning the lawfulness of these settlements. In particular, courts have struggled in assessing the legality of patent settlements between branded and generic drug manufacturers involving non-cash compensation or benefits. This article discusses one type of non-cash compensation that is …

The Actavis Inference: Theory And Practice, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

Aaron Edlin

In FTC v. Actavis, Inc., the Supreme Court considered "reverse payment" settlements of patent infringement litigation. In such a settlement, a patentee pays the alleged infringer to settle, and the alleged infringer agrees not to enter the market for a period of time. The Court held that a reverse payment settlement violates antitrust law if the patentee is paying to avoid competition. The core insight of Actavis is the Actavis Inference: a large and otherwise unexplained payment, combined with delayed entry, supports a reasonable inference of harm to consumers from lessened competition.This paper is an effort to assist courts and …

Activating Actavis, Aaron Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

Aaron Edlin

In Federal Trade Commission v. Actavis, Inc., the Supreme Court provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. The Court came down strongly in favor of an antitrust solution to the problem, concluding that “an antitrust action is likely to prove more feasible administratively than the Eleventh Circuit believed.” At the same time, Justice Breyer’s majority opinion acknowledged that the Court did not answer every relevant question. The opinion closed by “leav[ing] to the lower courts the structuring of the present rule-of-reason antitrust litigation.”This article is an effort to help courts and counsel …

Actavis And Error Costs: A Reply To Critics, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

Aaron Edlin

The Supreme Court’s opinion in Federal Trade Commission v. Actavis, Inc. provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. In our previous article, Activating Actavis, we identified and operationalized the essential features of the Court’s analysis. Our analysis has been challenged by four economists, who argue that our approach might condemn procompetitive settlements.As we explain in this reply, such settlements are feasible, however, only under special circumstances. Moreover, even where feasible, the parties would not actually choose such a settlement in equilibrium. These considerations, and others discussed in the reply, serve to confirm …

Deterring Innovation: New York V. Actavis And The Duty To Subsidize Competitors' Market Entry, Joanna Shepherd

Faculty Articles

This Article examines a relatively new business strategy in the pharmaceutical market -- "product hopping" or "product replacement" -- in which brand pharmaceutical companies shift their marketing efforts from a drug nearing the end of its patent period to a new, substitute drug with a longer patent life. In July 2015, the Second Circuit issued an opinion in the first appellate case addressing pharmaceutical product replacement, New York ex rel. Schneiderman v. Actavis PLC. This Article explains that product replacement is the predictable business response to the incentives created by patent law and state substitution laws, and withdrawing an …

A Profile Of Bio-Pharma Consolidation Activity, Jordan Paradise

Faculty Publications & Other Works

No abstract provided.

Describing Drugs: A Response To Professors Allison And Ouellette, Jacob S. Sherkow

Articles & Chapters

Profs. Allison and Ouellette’s Article, How Courts Adjudicate Patent Definiteness and Disclosure, 65 Duke L.J.609 (2015), on courts’ adjudication of certain patent disputes presents some surprising data: pharmaceutical patents litigated to judgment fare substantially worse on written-description analyses if they are not part of traditional pioneer-generic litigation. This Response engages in several hypotheses for this disparity and examines the cases that make up Allison and Ouellette’s dataset. An analysis of these cases finds that the disparity can be best explained by technological and judicial idiosyncrasies in each case, rather than larger differences among pharmaceutical patent cases. This finding contextualizes …

The Actavis Inference: Theory And Practice, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

In FTC v. Actavis, Inc., the Supreme Court considered "reverse payment" settlements of patent infringement litigation. In such a settlement, a patentee pays the alleged infringer to settle, and the alleged infringer agrees not to enter the market for a period of time. The Court held that a reverse payment settlement violates antitrust law if the patentee is paying to avoid competition. The core insight of Actavis is the Actavis Inference: a large and otherwise unexplained payment, combined with delayed entry, supports a reasonable inference of harm to consumers from lessened competition.

This paper is an effort to assist courts …

Patent Punting: How Fda And Antitrust Courts Undermine The Hatch-Waxman Act To Avoid Dealing With Patents, Rebecca S. Eisenberg, Daniel A. Crane

Michigan Telecommunications & Technology Law Review

Under the Hatch-Waxman Act, patent law and FDA regulation work together to determine the timing of generic entry in the market for drugs. But FDA has sought to avoid any responsibility for reading patents, insisting that its role in administering the patent provisions of the Hatch-Waxman Act is purely ministerial. This gap in regulatory oversight has allowed innovators to use irrelevant patents to defer generic competition. Meanwhile, patent litigation has set the stage for anticompetitive settlements rather than adjudication of the patent issues in the courts. As these settlements have provoked antitrust litigation, antitrust courts have proven no more willing …

Actavis And Error Costs: A Reply To Critics, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

The Supreme Court’s opinion in Federal Trade Commission v. Actavis, Inc. provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. In our previous article, Activating Actavis, we identified and operationalized the essential features of the Court’s analysis. Our analysis has been challenged by four economists, who argue that our approach might condemn procompetitive settlements.

As we explain in this reply, such settlements are feasible, however, only under special circumstances. Moreover, even where feasible, the parties would not actually choose such a settlement in equilibrium. These considerations, and others discussed in the reply, serve to …

Ftc V. Lundbeck: Is Anything In Antitrust Obvious, Like, Ever?, Chris Sagers, Richard M. Brunell

Law Faculty Articles and Essays

In FTC v. Lundbeck, the Eighth Circuit affirmed a bench verdict finding a merger to monopoly, followed by a 1400% price increase, not only legal, but effectively not even subject to antitrust. The result followed from the district court's view that peculiarities in the market for hospital-administered drugs rendered it essentially immune from price competition. That being the case, the court found that even products very plainly substitutable on any traditional "functional interchangeability" analysis are not in the same "relevant market" for purposes of rules governing horizontal mergers. We think the court's analysis was incorrect for a number of …

Pay-For-Delay Settlements In The Wake Of Actavis, Michael L. Fialkoff

Michigan Telecommunications & Technology Law Review

“Pay-for-delay” settlements, also known as reverse payments, arise when a generic manufacturer pursues FDA approval of a generic version of a brand-name drug. If a patent protects the brand-name drug, the generic manufacturer has the option of contesting the validity of the patent or arguing that its product does not infringe the patent covering the brand-name drug. If the generic manufacturer prevails on either of these claims, the FDA will approve its generic version for sale. Approval of a generic version of a brand-name drug reduces the profitability of the brand-name drug by forcing the brand-name manufacturer to price its …

Actavis, The Reverse Payment Fallacy, And The Continuing Need For Regulatory Solutions, Daniel A. Crane

Articles

The Actavis decision punted more than it decided. Although narrowing the range of possible outcomes by rejecting the legal rules at the extremes and opting for a rule of reason middle ground, the opinion failed to grapple with the most challenging issues of regulatory policy raised by pharmaceutical patent settlements. In particular, it failed to clearly delineate the social costs of permitting and disallowing patent settlements, avoided grappling with the crucial issues of patent validity and infringement, and erroneously focused on “reverse payments” as a distinctive antitrust problem when equally or more anticompetitive settlements can be crafted without reverse payments. …

Activating Actavis, Aaron Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

In Federal Trade Commission v. Actavis, Inc., the Supreme Court provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. The Court came down strongly in favor of an antitrust solution to the problem, concluding that “an antitrust action is likely to prove more feasible administratively than the Eleventh Circuit believed.” At the same time, Justice Breyer’s majority opinion acknowledged that the Court did not answer every relevant question. The opinion closed by “leav[ing] to the lower courts the structuring of the present rule-of-reason antitrust litigation.”

This article is an effort to help courts and …

A New Prescription To Balance Secrecy And Disclosure In Drug-Approval Processes, Gerrit M. Beckhaus

University of Michigan Journal of Law Reform

To obtain approval to market a drug, a manufacturer must disclose significant amounts of research data to the government agency that oversees the approval process. The data often include information that could help advance scientific progress, and are therefore of great value. But current laws in both the United States and Europe give secrecy great weight. This Article proposes an obligatory sealed-bid auction of the sensitive information based on the experience with similar auctions in mergers and acquisitions, to balance manufacturers' interest in secrecy and the public interest in disclosure.

Pharmaceutical Patent Litigation Settlements: Balancing Patent & Antitrust Policy Through Institutional Choice, Timothy A. Cook

Michigan Telecommunications & Technology Law Review

Should a branded pharmaceutical company be allowed to pay a generic competitor to stay out of the market for a drug? Antitrust policy implies that such a deal should be prohibited, but the answer becomes less clear when the transaction is packaged as a patent-litigation settlement. Since Congress passed the Hatch-Waxman Act, which encourages generic manufacturers to challenge pharmaceutical patent validity, settlements of this kind have been on the rise. Congress, the Department of Justice, and the Federal Trade Commission have condemned these agreements as anticompetitive and costly to American consumers, but none of these bodies has been able to …

Intellectual Property As An ‘Investment’ In International Law: A Question Of Access To Medicines Vs Access To Justice, Christopher Wadlow

Christopher Wadlow

No abstract provided.

Provigil: A Commentary, Daniel A. Crane

Articles

Michael Carrier's case study on Provigil' offers new support for the view that Big Pharma is to blame for stymieing competition, retarding innovation, and inflating prices in the drug industry. Carrier argues that Cephalon was able to thwart generic entry by a combination of anticompetitive strategies. It entered into a reverse payment settlement agreement with generics seeking to enter the market. These settlements purported to allow generic entry before the expiration of the patent period, but, according to Carrier, the promise of early entry was negated by the second prong of Cephalon's anticompetitive strategy. During the time that it had …

The Great Pharmaceutical Patent Robbery, And The Curious Case Of The Chemical Foundation, Christopher Wadlow

Christopher Wadlow

In 1918, the United States confiscated virtually all German-owned intellectual property assets within its jurisdiction. Out of 6,000 patents in the chemical field, 4,500 were assigned for a very modest consideration to an newly-established entity, the Chemical Foundation, which was incorporated with the objective of licensing and managing them for the benefit of the United States chemical industry. This article describes the origins and activities of the Chemical Foundation, and considers whether it provides a useful model, or at least useful lessons, for the collective management of patents today.

Unsettling Drug Patent Settlements: A Framework For Presumptive Illegality, Michael A. Carrier

Michigan Law Review

A tidal wave of high drug prices has recently crashed across the U.S. economy. One of the primary culprits has been the increase in agreements by which brand-name drug manufacturers and generic firms have settled patent litigation. The framework for such agreements has been the Hatch-Waxman Act, which Congress enacted in 1984. One of the Act's goals was to provide incentives for generics to challenge brand-name patents. But brand firms have recently paid generics millions of dollars to drop their lawsuits and refrain from entering the market. These reverse-payment settlements threaten significant harm. Courts nonetheless have recently blessed them, explaining …

The Problem Of New Uses, Rebecca S. Eisenberg

Articles

Discovering new uses for drugs that are already on the market seems like it ought to be the low-lying fruit of biopharmaceutical research and development (R&D). Firms have already made significant investments in developing these drugs and bringing them to market, including testing them in clinical trials, shepherding them through the FDA regulatory approval process, building production facilities, and training sales staff to market them to physicians. By this point, the drugs have begun to enjoy goodwill among patients and physicians and casual observations in the course of clinical experience may point to potential new uses. One might expect that …

An Overview Of Progress In The International Regulation Of The Pharmaceutical Industry, Joan Costa-Font, Aaron Burakoff Harvard University; University Of Barcelona

The University of New Hampshire Law Review

[Excerpt] “The pharmaceutical industry, a significant source of healthcare throughout the world, has several features that distinguish it from the rest of the health industry. In the last half-century, new technology, better technological know-how, and overall economic growth have led to widespread and rapid growth in the pharmaceutical sector. Advancements in pharmaceutical research and development have led to the production of drugs that can routinely combat afflictions that, only years ago, were untreatable or even fatal. Since 1970, the average share of Gross Domestic Product (GDP) on pharmaceutical goods has increased in most Organization for Economic Cooperation and Development (OECD) …