Pharmaceutical patent holders beware: Over the past year, antitrust enforcers have taken a more aggressive approach challenging Orange Book listings as an anticompetitive practice. According to the Federal Trade Commission, improperly listing patents in the Orange Book constitutes an unfair method of competition, among other violations.
In this article, Elai Katz, Lisa Rumin and Betty Zhang discuss the recent heightened scrutiny of Orange Book listings and highlight risks brand manufacturers should be aware of with respect to their Orange Book listing practices. Going forward, brand manufacturers should think proactively and consider carefully documenting their evaluation process and reasoning for listing patents in the Orange Book to satisfy the statutory requirements.
On July 18, 2018, US Food and Drug Administration (FDA) Commissioner Scott Gottlieb delivered a speech at The Brookings Institution in Washington, DC, discussing how to bolster competition from biosimilars while maintaining innovation.
The Commissioner noted the absence of true competition among biologics from biosimilar products in the United States, similarly to what the country experienced 30 years ago with respect to generics. The Commissioner said that this situation is caused, in part, by what he views as anticompetitive practices implemented by branded manufacturers, such as:
Rebating schemes in which drug manufacturers bundle discounts to health insurers and employers across different pharmaceutical products;
Multi-year contracts granting important rebates to payors, often entered into right before the entry of a biosimilar on the market;
Volume-based rebates;
Tying rebates, i.e., when rebates are offered if a product is bought together with a biologic;
Patent thickets, i.e., when branded manufacturers’ own dense portfolios of overlapping intellectual property rights cover biologics; and
Bundling biologics with other products, i.e., when a product is sold together with a biologic.
On 20 December 2017, the French Competition Authority (the FCA) imposed a EUR 25 million fine on a pharmaceutical laboratory, for delaying entry onto the market of the generic version of Durogesic, and for hindering its development through a disparagement campaign.
No public version of the decision is available yet, nonetheless the FCA has already published a detailed press release (available in French).
WHAT HAPPENED
Durogesic is a powerful opioid analgesic, which active substance is fentanyl, usually prescribed in the form of transdermal patch for the treatment of severe pain, including chronic cancer pain. In 2007, a competing pharmaceutical company launched its generic equivalent. (more…)
On 19 January 2017, the Italian Competition Authority (AGCM) and the Italian Medicines Agency (AIFA) signed a memorandum of understanding in order to increase enforcement in the pharmaceutical sector by strengthening their investigation powers and facilitating the exchange of data. Under the agreement, AGCM and AIFA will inform each other on cases concerning alleged violations of rules enforced by one of them. In particular, in case of negotiations carried out by AIFA with pharmaceutical companies on the applicable drugs prices, or whether counterfeiting cases regarding pharmaceutical products emerge during an investigation. Furthermore, the authorities will cooperate in their advocacy activities and in carrying out sector enquiries. Finally, the authorities will exchange information and data on matters of common interest.
Today the Federal Trade Commission (FTC) announced proposed changes to the Hart-Scott-Rodino (HSR) premerger notification rules that will impact the types of transactions for which pharmaceutical companies will be required to file HSR notifications with the Department of Justice and FTC. The proposed rulemaking is meant to clarify when a transfer of exclusive rights to a patent in the pharmaceutical industry results in a potentially reportable acquisition of assets under the HSR Act.
Previously — although never actually codified — the FTC would determine whether the transfer of rights to a patent (usually in the form of a license) was a reportable event under the HSR Act by focusing on whether the licensor transferred the exclusive rights to "make, use and sell" under a patent. The emphasis on the transfer of the exclusive right to manufacture would result in scenarios where parties would not be required to report the transfer of patent rights because although the licensor transferred the rights to commercialize the product, it retained the right to manufacture the product.
In an effort to place substance over form, the proposed rulemaking instead suggests an "all commercially significant rights" test, where a transfer of "the exclusive rights to a patent that allow only the recipient of the exclusive patent rights to use the patent in a particular therapeutic area (or specific indication within a therapeutic area)" would constitute a potentially reportable acquisition of assets if the size-of-transaction and size-of-person (if applicable) thresholds are met, and no exemption is applicable. The proposed rules further explain that all commercially significant rights are transferred even if the patent holder retains limited manufacturing rights to provide the licensee with product(s) covered by the patent, or co-rights to assist the licensee in developing and commercializing the product(s) covered by the patent. Please note that this rule would only apply to patents within the pharmaceutical industry (as this is the industry in which these scenarios most often occur).
The text of the proposed rulemaking can be found here. The FTC is accepting comments until October 25, 2012.
UPDATE: The U.S. Federal Trade Commission’s new proposed Hart-Scott-Rodino Act rules will apply only to transfers of pharmaceutical patent rights and are expected to increase the number of filings. Click here to read the full article, "FTC’s Proposed Rules Would Generate More HSR Filings for Transfers of Pharmaceutical Patent Rights."
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