Antitrust Alert: New Law Requires Disclosure of Biologic Patent Settlement Agreements to Antitrust Authorities
Last week, the Patient Right to Know Drug Prices Act ("Act") became law. The Act requires pharmaceutical companies to disclose to antitrust agencies agreements between biologic and biosimilar companies that relate to the manufacture, marketing, or sale of biologic and biosimilar products.
The Act amends the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 ("MMA"), which requires drug manufacturers to file with Department of Justice Antitrust Division and the Federal Trade Commission ("FTC") when they enter into agreements regarding the manufacture, marketing, or sale of small-molecule drug products. The FTC, the agency that typically reviews pharmaceutical antitrust matters, has investigated numerous small-molecule drug agreements submitted to it under the MMA for so-called "pay for delay" settlement tactics. Parties to a Hatch-Waxman patent case may settle their dispute by deciding on a date (prior to patent expiration or other exclusivity period) upon which the generic can launch its product. If the settlement also involves a payment from the brand manufacturer to the generic, the FTC (or private plaintiffs) might allege that the settlement reflects unlawful "pay for delay," and that absent the payment the generic product would have come to market sooner, either by prevailing in the patent case or by obtaining a more favorable settlement.
Now, biologic and biosimilar manufacturers also will need to report patent settlements. The Act requires pharmaceutical companies to file agreements that relate to the manufacture, marketing, or sale of the already-approved FDA reference product or the biosimilar product, the exclusivity period for biosimilar products, or any biosimilar application. This new law will allow the FTC to discover the terms of biologic/biosimilar settlements under the MMA without using compulsory process, which likely will lead to an uptick in investigations and follow-on enforcement actions.
It is no surprise that biologic product agreements now receive parallel treatment to small-molecule drug agreements. The Act demonstrates the continued need to focus on drug prices and adds to the growing attention from authorities and private litigants to antitrust issues related to biologic drugs.
For more information, please contact your principal Jones Day representative or any of the lawyers listed below.
Rosanna K. McCalips
Julia E. McEvoy
Larissa C. Bergin, an associate in the Washington Office, assisted in the preparation of this Alert.
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