Branded drug reformulation: The next brand vs. generic antitrust battleground

Food and Drug Law Journal

Volumn 62, Issue 1, 2007, Pages 249-256

  Amoresano, Guy V ^a  

^a Business and Commercial Litigation   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

FENOFIBRATE; GENERIC DRUG; LOFIBRA; UNCLASSIFIED DRUG;

CONSUMER; COURT; DRUG FORMULATION; DRUG INDUSTRY; DRUG LEGISLATION; DRUG MARKETING; FOOD AND DRUG ADMINISTRATION; PHARMACIST; PHARMACY; REVIEW;

ANTITRUST LAWS; COMMERCE; DRUG APPROVAL; DRUG INDUSTRY; DRUGS, GENERIC; ECONOMIC COMPETITION; ECONOMICS, PHARMACEUTICAL; HUMANS; LEGISLATION, DRUG; PATENTS; UNITED STATES; UNITED STATES FOOD AND DRUG ADMINISTRATION;

EID: 33947128724     PISSN: 1064590X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (33)

1. The recent retail price war in generic drug sales started by Wal-Mart will likely widen the gap between branded drug prices and generic prices, adding further impetus for antitrust scrutiny of efforts to forestall generic competition.
2. The FTC shares jurisdiction with the United States Department of Justice, Antitrust Division for enforcement of federal antitrust law. See 15 U.S.C §§ 41, et seq. Of the two, the FTC has taken the lead in recent years with respect to antitrust issues affecting the pharmaceutical industry.
3. FTC Staff, Informal, Unpublished Remarks Before the 2006 American Bar Association 54th Antitrust Law Spring Meeting.
4. Abbott Laboratories v. Teva Pharmaceuticals USA, Inc., 432 F. Supp.2d 408 (D. Del. (2006)); Walgreen Co., et al. v. AstraZeneca Pharmaceuticals L.P, et al., Civ. Action No. 1:06-cv-02084-RWR (D. Del. (12/07/2006)).
5. Abbott Labs, supra note 4.
6. Congress's power to grant patent monopolies is found in Article I, section 8 of the Constitution, and mere acquisition of a patent monopoly, even if it gives rise to an economic monopoly, does not violate the Sherman Act. See, e.g., SCM Corp. v. Xerox Corp., 645 F.2d 1195, 1206 (2d Cir. (1981)), cert. denied, 455 U.S. 1016 (1982). In Illinois Tool Works Inc. v. Independent Ins., Inc., 547 U.S. 1 (2006), the Supreme Court recently held that monopoly power (a/k/a market power) cannot be presumed merely from the presence of a patent. This article is intended to address those instances in which the antitrust plaintiff can plead and prove that the brand drug manufacturer has market power in the product market for its drug.
7. Section 2 of the Sherman Act prohibits monopolization or attempted monopolization of any part of interstate commerce, 15 U.S.C. § 2.
8. 21 U.S.C. §§ 355, 360cc; 35 U.S.C. §§ 156, 271 and 278.
9. See generally Abbot Labs, 432 F. Supp.2d at 414-415 (discussion of the operation of the Hatch-Waxman Act).
10. See Drug Product Selection, Staff Report to the FTC, at 49-50 (Jan. 1979).
11. Id. at 291.
12. See, e.g., Schering-Plough Corp. v. F.T.C., 402 F.3d 1056, 1067 (11th Cir. (2005)), cert. denied, 2006 WL 1725862 (2006).
13. See, e.g., id. A second strategy being employed by the brand name companies, that of launching their own "authorized generic," is also receiving attention as a possible attempt to chill the incentive for generic drug development. FTC Commissioner Jon Leibowitz, Remarks Before the Senate Special Committee on Aging, (July 21, 2006).
14. 432 F. Supp.2d 408 (D. Del. (2006)).
15. The ANDA was actually filed by Novopharm, LTD, Teva's predecessor in interest, and the litigation concerned the conduct not only of Abbott but also of its licensees. For ease of reference, this article refers to the parties aligned with Abbott collectively as "Abbott," and the parties aligned with Teva collectively as "Teva."
16. Teva's eventual antitrust allegations against Abbott also included the allegation that Abbott's patent claims were a sham. These allegations are outside the scope of this article.
17. 432 F Supp. at 416-18.
18. Id. at 418-420, 423-424.
19. 253 F.3d 34 (D.C. Cir. (2001)).
20. 481 F. Supp. 965 (N.D. Col. (1979)), aff'd, 698 F.2d 1377 (9th Cir. (1983)).
21. Abbott Labs, supra note 4, Teva's Answering Brief in Opposition to Abbott's and Fournier's Motion to Dismiss Counterclaims, at 23-26 (filed (12/02/05)).
22. 603 F.2d 263 (2d Cir. (1979)).
23. Abbott Labs, supra note 4, Defendants' Memorandum of Law in Support of Their Consolidated Motion to Dismiss Plaintiffs' Complaints at 9-11 (filed 10/19/05) (quoting 3A Philip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 776d (2d ed. (2002)).
24. 432 F. Supp.2d at 421-422.
25. Id. at 422.
26. Id. at 423-424.
27. Id. at 421 (quoting Berkey Photo, supra note 22, at 287).
28. Id. (quoting Areeda & Hovenkamp, supra note 23, ¶ 776d).
29. Berkey Photo, supra note 22, at 263 & n. 39. The coercive conduct hypothesized by the Berkey Photo court, however, was very different than anything alleged by Teva. The court hypothesized a scenario under which Kodak, having invented a new camera and associated film size, ceased supplying another film size for which it was a monopoly source and without which competing cameras would be useless.
30. Microsoft, supra note 19, at 64-66 ("Judicial deference to product innovation, however, does not mean that a monopolist's product design decisions are per se lawful."). The design changes at issue in Microsoft had the effect of technologically impairing the ability of a rival's internet browser software to be installed on computers running Microsoft Windows® in place of Microsoft's own browser software.
31. Abbott Labs, supra note 4, Teva Counterclaims ¶ 79.
32. It must be noted here that the Abbott Labs court may well have denied Abbott's motion to dismiss, even if the stricter standard of proof advanced by Abbott had been adopted. It was plainly Teva's contention that the TriCor® reformulations represented no improvement at all over the prior product and that they were introduced solely to thwart Teva's generic entry. Moreover, Teva's claims against Abbott included the allegation that Abbott's two patent infringement actions against Teva were a sham. At least on a motion to dismiss, Teva's allegations, taken as a whole, may well have risen to the level necessary to satisfy the very test that Abbott espoused. Counsel for brand name manufacturers might do well to suggest a somewhat less overtly aggressive approach to a patent litigation plus reformulation strategy than that reflected in Teva's allegations against Abbott.
33. Walgreens, supra note 4.