1,827,156 research outputs found
Citizen Petitions: Long, Late-Filed, and At-Last Denied
No full textThe pharmaceutical industry is ground zero for many of the most challenging issues at the intersection of antitrust and intellectual property law. It also presents a complex regulatory regime that is ripe for anticompetitive behavior. It thus should not be a surprise that the industry has been subject to rigorous antitrust scrutiny in recent years.
While settlements between brand and generic firms and “product hopping” from one version of a drug to another have received attention, one behavior has avoided serious scrutiny. Brand firms’ filing of citizen petitions with the U.S. Food and Drug Administration (FDA) has almost entirely slipped beneath the radar. While citizen petitions in theory could raise concerns that a drug is unsafe, in practice they bear a dangerous potential to extend brand monopolies by delaying approval of generics at a potential cost of millions of dollars per day.
This Article offers an empirical study of “505(q)” citizen petitions, which ask the FDA to take specific action against a pending generic application. It analyzes every 505(q) petition filed with the FDA between 2011 and 2015, documenting (1) the number of petitions each year, (2) who filed the petitions, (3) the success rate of the petitions, (4) the petitions’ length, (5) whether petitions were filed in close proximity to the expiration of a patent or data exclusivity, and (6) occasions in which the FDA approved generics on the same day it decided petitions.
The study finds that brand firms filed 92% of 505(q) petitions. And it concludes that the FDA granted an astonishingly low 8% of petitions, rejecting a full 92%. Why is the grant rate so low? We consider several reasons. First, in the past 5 years, the average length of petitions has more than doubled, and the FDA almost never grants petitions with a length above the mean. Second, 39% of petitions are filed within 6 months of the expiration of a patent or FDA exclusivity, with almost all of these petitions denied. Third, the FDA resolved a number of petitions on the same day it approved the generic, suggesting that the Agency delayed generic approval until it resolved the petition. These three settings resulted in grants of only 3%, 2%, and 0%, respectively.
The Article concludes by offering examples of serial petitions, late-filed petitions, and a combination of petitions with other behavior, such as product hopping and settlements. In short, citizen petitions represent a hidden tool in a brand firm’s toolkit of entry-delaying activity that can lead to consumers paying high drug prices while providing no offsetting safety benefit
Why A "Large and Unjustified" Payment Threshold is Not Consistent with Actavis
No full textFTC v. Actavis was a landmark antitrust decision. In rejecting the “scope of the patent” test that had immunized settlements by which brand-name drug firms pay generic companies to delay entering the market (“exclusion payment settlements”), the Supreme Court made clear that such agreements “tend to have significant adverse effects on competition” and could violate the antitrust laws.
Some lower courts and defendants have sought to sow ambiguity in the post-Actavis caselaw by creating new thresholds and frameworks not articulated or envisioned by the Court. In particular, they have latched onto the discussion in Actavis of a “large and unjustified” payment. The district court in In re Loestrin 24 FE Antitrust Litigation, for example, imposed a framework that required analysis of (1) whether “there [is] a reverse payment” and (2) whether “that reverse payment is large and unjustified” before addressing (3) the rule of reason. The Loestrin court borrowed this framework from the district court in In re Lamictal Direct Purchaser Antitrust Litigation. And defendants have contended, for example, that “Actavis requires a plaintiff challenging a reverse-payment settlement . . . to prove, as a threshold matter, that the . . . payment was both large and unjustified” and that “under Actavis, [plaintiffs] have to prove that [a] payment was ‘large’ (as well as unexplained).”
This article offers three reasons why a requirement that a plaintiff demonstrate a large and unjustified payment before reaching the Rule of Reason is not consistent with Actavis. First, nearly all of the Court’s discussion of large and unjustified payments occurred in contexts having little to do with the antitrust analysis that future courts were to apply. Second, the Court instructed lower courts to apply the Rule of Reason, not a new framework with a threshold it never mentioned. And third, such a threshold is inconsistent with the Court’s (1) allowance of shortcuts for plaintiffs to show anticompetitive effects and market power and (2) imposition of the burden on defendants to show justifications for a payment
After Actavis: Seven Ways Forward
No full textThe Supreme Court’s decision in FTC v. Actavis is one of the most important antitrust decisions in the modern era. This symposium in the Rutgers University Law Review, which accompanied a live conference at the University of San Francisco Law School, consists of seven articles that provide guidance on Actavis.
This foreword introduces the articles, which (1) explain why courts have misconstrued Actavis (Davis & McEwan); (2) articulate the “Actavis inference” and show how it reveals errors in court opinions and scholarship (Edlin, Hemphill, Hovenkamp, & Shapiro); (3) offer a set of jury instructions that courts can use in reverse-payment cases (Sorenson & Shadowen); (4) explain why brand promises not to introduce their own generics constitute payment (Carrier); (5) show how state law can target reverse-payment settlements (Johnson); (6) explain why the Noerr-Pennington doctrine does not immunize reverse-payment settlements (Garcia); and (7) demonstrate how Actavis can apply beyond the pharmaceutical industry (Ghosh)
How Not To Apply Actavis
No full textOne of the most pressing issues in patent and antitrust law today involves agreements by which brand-name drug companies pay generic firms to delay entering the market. In June 2013, in FTC v. Actavis, Inc., the U.S. Supreme Court concluded that these “exclusion payment”1 settlements (in which exclusion comes from the payment rather than the patent) could have “significant anticompetitive effects” and violate the antitrust laws.
In ensuring a robust role for antitrust analysis, the Court handed down one of the most important business cases in the past generation. And it articulated a blueprint for future analysis based on antitrust law’s “rule of reason.” But the Court did not specify every step in the analysis or consider every type of settlement. Instead, it called on “lower courts . . . [to] structur[e] . . . the present rule-of-reason antitrust litigation.”
Along these lines, two recent district court rulings portend ominous signs. In the first case, In re Lamictal Direct Purchaser Antitrust Litigation, the District of New Jersey granted a motion to dismiss plaintiffs’ challenge to a settlement on a drug treating epilepsy and bipolar disorder. In doing so, the Lamictal court used the five factors that the Actavis Court had employed to justify more aggressive antitrust scrutiny to instead excuse its decision to employ less vigorous scrutiny. Just as concerning, it substituted its own armchair analysis for the burdens of proof articulated in Actavis.
In the second case, In re Loestrin 24 FE Antitrust Litigation, the Rhode Island District Court relied on Lamictal’s flawed framework to grant motions to dismiss plaintiffs’ challenge to a settlement delaying generic entry of an oral contraceptive.5 The court agonized over the “close call” presented by the case while failing to recognize that it was its own following of the Lamictal court’s framework that led it into briar patches of confusion, uncomfortable policy conclusions, neglect of pleading standards, and encouragement of conduct that it knew would “evade [antitrust] scrutiny.”
If the Lamictal and Loestrin decisions are upheld and adopted by other courts, plaintiffs will face insurmountable hurdles, rendering the landmark Actavis decision nothing more than a dead letter. This Essay shows that the Lamictal and Loestrin courts erred in (1) applying a framework never anticipated in Actavis; (2) ignoring crucial holdings from Actavis; and (3) amassing unjustified powers for themselves.
By blocking affordable generic prescription drugs, exclusion-payment settlements cost consumers billions of dollars and have profound consequences for public health. But if the trend unleashed by the Lamictal and Loestrin cases is not quickly reversed, courts will be relegated to the role of traffic cops waving anticompetitive settlements through flashing green lights of judicial “scrutiny.
The "Equity of the Statute" and Copyright Law: Three Critiques
No full textIn response to Shyamkrishna Balganesh & Gideon Parchomovsky, Equity's Unstated Domain: The Role of Equity in Shaping Copyright Law, 163 U. Pa. L. Rev. 1859 (2015)
The Rule of Reason in the Post-Actavis World
No full textThough known more as U.S. President and Supreme Court Chief Justice, William Howard Taft played an important role in the development of antitrust law. As Sixth Circuit judge, his ruling in the Addyston Pipe case can be linked to modern antitrust law, including the Supreme Court’s 2013 decision in FTC v. Actavis on drug patent settlements. This essay draws lessons from Addyston Pipe for these settlements, explains how courts today apply the Rule of Reason, and explores the analysis of settlements after Actavis
Why property law does not support the antitrust abandonment of standards
No full textProperty is being hijacked. In property law itself, it is well-recognized that owners’ rights are accompanied by robust limits. No one familiar with property law could reasonably claim that property owners have absolute rights to exclude.
But when the concept of property is exported elsewhere, those limits are sometimes forgotten. Such a version of property is viewed as absolute, not restricted by any limits. In the copyright realm, for example, we have seen it with owners claiming that infringement is “theft” or “piracy.”
And now we are seeing it in the antitrust arena. Assistant Attorney General (AAG) Makan Delrahim has advocated an absolutist conception of property for patents, asserting that they provide an unqualified right to exclude followed by an injunction. That position is accompanied by the claim that antitrust has no role to play in addressing patent holdup, which occurs when a patent owner seeks an injunction or excessive royalties after an industry has adopted a patented technology that cannot be avoided.
This article (written for a symposium on IP and property) demonstrates how absolutist conceptions of limitless rights are not consistent with property law and do not justify abandoning antitrust scrutiny of patent holdup. If AAG Delrahim is going to launch an assault on antitrust's vital role in policing standard-setting abuses, he will need support from somewhere other than property law
Eight Reasons Why "No-Authorized-Generic" Promises Constitute Payment
No full textDrug patent settlements present some of the most nuanced issues in patent and antitrust law today. Does a brand-name drug company’s payment to a generic firm cause delayed entry? Does a brand’s forgiveness of a generic’s potential damages constitute payment? How should courts evaluate parties’ simultaneous settlement of multiple cases?
To this universe of complex questions, courts have added one that is embarrassingly easy: Is there a payment when a brand promises not to introduce its own generic (known as an “authorized generic” or “AG”), which could be worth millions of dollars to the generic? Under any reasonable interpretation of economics, the Supreme Court’s 2013 decision in FTC v. Actavis, or common sense, such a promise constitutes payment.
In two recent cases, however, courts held that brands’ no-AG promises did not count as payment. The New Jersey district court in In re Lamictal Direct Purchaser Antitrust Litigation found that “nothing in Actavis” indicated that “a no-AG agreement is a ‘payment.’” And in In re Loestrin 24 FE Antitrust Litigation, the Rhode Island district court found that Actavis “fixates on the one form of consideration that was at issue in that case: cash.”
This article first provides background on drug patent settlements and authorized generics. It then examines the Lamictal and Loestrin cases. Finally, it offers eight reasons why a no-AG promise constitutes payment. First, such a conclusion is consistent with the language of Actavis. Second, it accords with the facts of Actavis. Third, a no-AG pledge typically provides significant value to generics. Fourth, generics receive more through such promises than they would by winning patent litigation. Fifth, brands act against their self-interest in making no-AG promises, which reveals generics’ gain from the pledges. Sixth, treating no-AG promises as payment emphasizes substance over form. Seventh, such pledges can be more coercive than cash payments. And eighth, the clauses present a classic example of market division
College athletics: the chink in the Seventh Circuit's "Law and economics" armor
No full textIf any court is linked to the “law and economics” movement, it is the Seventh Circuit, home of former Judge Richard Posner, the “Chicago School,” and analysis based on markets and economics.1 It thus comes as a surprise that in college-athletics cases, the court has replaced economic analysis with legal formalisms. In adopting a deferential approach that would uphold nearly every rule the National Collegiate Athletic Association (NCAA) claims is related to amateurism, the court recalls the pre-Chicago School era, in which courts aggressively applied “per se” illegality based on a restraint’s form, rather than substance.2 While the Seventh Circuit’s detour of deference has taken several stops, this Essay focuses on the most recent, the 2018 decision in Deppe v. NCAA.3
In Deppe, a college football punter who believed he would receive an athletic scholarship began pursuing transfer opportunities after learning that he would not. Pursuant to the NCAA’s “year-in-residence” rule, however, the punter would have been forced to sit out for one year before he could play for his new school.4 The punter claimed that the NCAA’s rule violated antitrust law. But the district court dismissed the claim, and the Seventh Circuit affirmed, finding that the rule was “presumptively procompetitive.”
The Seventh Circuit’s ruling suffered from four critical flaws. First, the court misread antitrust precedent, relying on dicta from a decades old Supreme Court case addressing a different issue to manufacture a wholly new analytical framework. Second, the court is construed antitrust law by neglecting the longstanding “Rule of Reason” analysis that involves burden shifting and emphasizes consumer welfare. Third, the Seventh Circuit ignored the procedural setting of a motion to dismiss, making up facts benefiting the defendant rather than—as hornbook law makes clear—applying facts in the light most favorable to the plaintiff. And fourth, the court neglected the economics that would have shown the anticompetitive nature of the year-in-residence restriction on student athletes’ movement between schools
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