Antitrust Laws and Comparator Drug Access

As a follow-up to our previous article on the CREATES ACT, other types of clinical trials for which we seek comparator drugs are mostly for head-to-head comparisons for new indications, or non-inferiority trials, and generally fall under 505(b)(1), or “stand alone” NDAs. Denial of access to comparator drugs for this purpose is tantamount to a unilateral refusal to deal.

Voluntarily adopted, restricted distribution, such as where a brand company limits/refuses access to its products, raises antitrust concerns by delaying or preventing competitors from entering the market. This violates Sec. 1 and 2 of the Sherman Act,[1] and Sec. 3 of the Federal Trade Commission Act.[2],[3]  Private plaintiffs have brought lawsuits alleging antitrust law violations relating to abuse of these laws. Restricted distribution system abuse and the antitrust issues of brand manufacturers that blocked access to their products resulted in the passage of the CREATES Act provision. Prior to passage of that Act, the Food and Drug Administration (FDA) had received more than 150 complaints from manufacturers that had difficulty obtaining samples of brand-name drugs at fair value in the open market.[4] It had actually posted a list of products which FDA had received access inquiries in an effort to increase transparency and raise awareness about the scope of the access problem for drug study.

There have been a number of cases where monopolists have been found to have a duty to give competitors access to facilities that are essential to compete in the market. The Supreme Court has recognized that monopolists may have such a duty under the “essential facilities doctrine.”[5],[6]  Both the FTC and private plaintiffs have argued that this doctrine applies to abusive restricted distribution systems. “Exclusionary” conduct is identifiable by its tendency to “impair opportunities of rivals” and “either does not further competition on the merits or does so in an unnecessarily restrictive way.”[7] All that is required to prevail is a showing that: 1) The pharmaceutical company cannot obtain access to samples of the drug through any channel besides access from the brand-name pharmaceutical company; and 2) the brand pharmaceutical company has no valid business reason, such as complying with FDA requirements, to refuse to deal with the generic company.[8],[9] A prior course of dealing between the two companies is not a necessary element of the claim.[10] Such antitrust suits by private litigants such as wholesalers, CROs and pharmaceutical companies may seek treble damages to remedy abuses of restricted distribution systems.

Additionally, private plaintiffs have brought cases alleging that brand pharmaceutical companies have used restrictive distribution systems as a pretext to prevent generic entry. The cases are brought under the Sherman Act and state antitrust laws and allege denial of needed product samples. 

How Frier Levitt Can Help

Frier Levitt, LLC offers a full range of Government Affairs/Advocacy services to assist and counsel wholesalers, drug distributors and pharmacies on various regulations set forth by federal and state agencies. We can help you navigate FDA and FTC guidelines or if you have general questions concerning regulation of comparator drugs or restrictive distribution systems, contact us today to speak with an attorney. 

 

[1] 15 U.S.C. §1; 15 U.S.C. §2.

[2] FTC v. Vyera Pharmaceuticals, LLC, 20-CV-00706 (Jan. 20, 2020).

[3] Mylan v. Celgene Corp., 2014 WL 12810322, (D.N.J. Dec. 23, 2014).

[4] Statement of Scott Gottlieb,MD, Commissioner, Food and Drug Administration Before the House Committee on the Judiciary  Subcommittee on Regulatory Reform, Commercial and Antitrust Law, July 27, 2017.

[5] Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 601-611 (1985).

[6] Other Tail Power Co. v. United States, 410 U.S. 366, 378 (1973).

[7] Actelion Pharmaceuticals, LDTD v. Apotex, Case. No. 1:12-cv-05743-NLH-AMD. Federal Trade Commission Brief As Amicus Curiae. Filed 3/11/2013.

[8] FTC Actelion Amicus Brief, at 9-15.

[9] FTC Mylan Amicus Brief, at 8-15.

[10] Natco Pharm Ltd, 2015 WL 5718398.

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