Third Circuit Antitrust Decision Makes Pharmaceutical Patent Disputes Nearly Impossible to Settle

FTC_Man_Controlling_TradeThe U.S. Supreme Court’s 2013 FTC v. Actavis, Inc. decision held that “reverse payment” settlement agreements—in which a drug company suing a generic competitor for patent infringement pays the alleged infringer a substantial amount of cash to settle the litigation—are subject to antitrust scrutiny.  The Court reasoned that such reverse payments are unusual and may indicate that the generic company is really being paid not to compete.

An August 21, 2017 decision from the U.S. Court of Appeals for the Third Circuit has stretched the Actavis holding far beyond anything intended by the Supreme Court.  If the appeals court’s decision in In re: Lipitor Antitrust Litigation is allowed to stand, it may become virtually impossible for drug companies to settle patent-infringement litigation. Continue reading “Third Circuit Antitrust Decision Makes Pharmaceutical Patent Disputes Nearly Impossible to Settle”

FTC’s Action against “Repetitive” Filing of Citizen Petitions Reflects Expanding Pharma-Sector Enforcement Program

Featured Expert Column: Antitrust & Competition Policy — Federal Trade Commission

06633 - Royall, M. Sean ( Dallas )By M. Sean Royall, a Partner with Gibson, Dunn & Crutcher LLP, with Richard H. Cunningham, Of Counsel in the firm’s Denver, CO office, and Andrew B. Blumberg, an Associate Attorney in the firm’s Dallas, TX office.

On February 7th, 2017, the Federal Trade Commission (FTC) filed a complaint alleging that Shire ViroPharma Inc. (Shire) violated the antitrust laws by filing sham citizen petitions in an effort to forestall generic competition for its branded prescription drug, Vancocin.  The case is another stepping stone in the agency’s steadily expanding efforts to police what it views as potential antitrust abuses in the pharmaceutical sector. Continue reading “FTC’s Action against “Repetitive” Filing of Citizen Petitions Reflects Expanding Pharma-Sector Enforcement Program”

FTC Takes a Commendable First Step Toward Reducing the Burden of Consumer-Protection Investigations

Featured Expert Column:
Antitrust & Competition Policy — Federal Trade Commission

06633 - Royall, M. Sean ( Dallas )By M. Sean Royall, a Partner with Gibson, Dunn & Crutcher LLP, with Richard H. Cunningham, Of Counsel in the firm’s Denver, CO office, and Ashley M. Rogers, an Associate Attorney in the firm’s Dallas, TX office.

On July 17, 2017, Federal Trade Commission (FTC) Acting Chairman Maureen K. Ohlhausen announced internal process reforms that aim to “streamline information requests and improve transparency” in the agency’s consumer-protection investigations.  According to the announcement, going forward the Bureau of Consumer Protection will:

  • provide “plain language” descriptions of the civil investigative demand (CID) process the agency uses as its primary tool for gathering information during investigations on a compulsory basis;
  • provide “more detailed” descriptions of the scope and purpose of investigations;
  • limit the relevant time periods covered by CID informational requests;
  • “significantly” reduce the length and complexity of CID instructions for providing electronically stored data; and
  • increase the time available to respondents to respond to agency CIDs.

Continue reading “FTC Takes a Commendable First Step Toward Reducing the Burden of Consumer-Protection Investigations”

Will “Kokesh v. SEC” Put a Kink in the Federal Trade Commission’s Disgorgement Hose?

Featured Expert Column: Antitrust & Competition Policy — Federal Trade Commission

06633 - Royall, M. Sean ( Dallas )By M. Sean Royall, a Partner with Gibson, Dunn & Crutcher LLP, with Richard H. Cunningham, Of Counsel in the firm’s Denver, CO office.*

Ed. Note: This is Mr. Royall’s debut column as the WLF Legal Pulse‘s new Antitrust & Competition Policy, FTC “Featured Expert Contributor.” WLF recognizes and appreciates former FTC Featured Expert Contributor Andrea Murino‘s four years of serving in that pro bono position.

On June 5th, 2017, the Supreme Court held in Kokesh v. SEC that disgorgement is a “penalty” subject to a five-year statute of limitations under 28 U.S.C. § 2462.  With that ruling, the Court explicitly rejected the long-standing assertion of the Security and Exchange Commission (SEC) that it possesses authority to reach back indefinitely when seeking the disgorgement of ill-gotten gains.  While the Kokesh opinion explicitly limits its holding to disgorgement “as it is applied in SEC enforcement proceedings,”1 the Court’s logic extends to disgorgement actions brought by other agencies proceeding under analogous statutory authority, including the Federal Trade Commission (FTC). Continue reading “Will “Kokesh v. SEC” Put a Kink in the Federal Trade Commission’s Disgorgement Hose?”

“Kokesh v. SEC”: Its Wide-Ranging (and Mostly Good) Implications for Disgorgement Actions

MorrisGuest Commentary

By Andrew J. Morris, a Partner with Morvillo LLP. Mr. Morris authored a March 10, 2017 WLF Legal BackgrounderIs the Clock Running out on SEC’s Unchecked Pursuit of Disgorgement Penalties?

In Kokesh v. Securities and Exchange Commission, the US Supreme Court ruled that SEC actions for disgorgement are governed by the five-year statute of limitations for penalties. This decision is a real blow to the SEC: It ends the practice of using disgorgement actions to obtain massive sanctions for conduct that took place many years in the past, outside the limitations period for penalties and forfeitures. The decision also invites defendants to make further challenges to SEC enforcement actions by litigating several related issues.

Implications for Enforcement Proceedings

The Court’s opinion, written by Justice Sotomayor, is summarized in a WLF Legal Pulse post authored last week by UCLA School of Law Professor Stephen Bainbridge. The gist of the decision is that disgorgement is a form of penalty because it involves a defendant who has violated a public law and must pay money to the United States Treasury; this contrasts with non-penalty cases, where the defendant has injured a particular victim and must pay compensation to that victim. And because disgorgement is a penalty, the Supreme Court held, disgorgement actions are covered by 28 U.S.C. § 2462, the five-year statute of limitations for penalties. Continue reading ““Kokesh v. SEC”: Its Wide-Ranging (and Mostly Good) Implications for Disgorgement Actions”

“U.S. v. Anthem/Cigna” and Regrettable Skepticism of Procompetitive Efficiencies

Antitrust & Competition — US Department of Justice

swisherAnthony W. Swisher, a Partner in the Washington, DC office of Squire Patton Boggs (US) LLP.

One of the principles underlying merger analysis has always been that mergers provide value to society. Historically, this idea has seen practical expression in a degree of humility on the part of the antitrust enforcement agencies, and a reluctance to intervene too hastily in a deal, lest they disrupt the benefits that might flow from it. Another practical expression of the recognition of merger-specific benefits is the availability of the efficiencies defense. Under the Horizontal Merger Guidelines, the Department of Justice’s Antitrust Division and the Federal Trade Commission will consider the degree to which a deal will permit the merging parties to obtain efficiencies that would not be available to them individually. Continue reading ““U.S. v. Anthem/Cigna” and Regrettable Skepticism of Procompetitive Efficiencies”

FTC Must Refocus on Harm to Consumers and Competition

FTC_Man_Controlling_Trade

Federal agencies regularly use statistics to demonstrate their relevance and justify their exorbitant budgets. The Justice Department, for instance, boasts about the billions it brought in from False Claims Act lawsuits last year. The Environmental Protection Agency brags about the amount of fines and years in jail resulting from its enforcement actions in 2016. But the public is rarely provided concrete evidence of how those incarcerations and billions in fines, say, actually reduce contracting fraud or improve the environment.

So, too, with the Federal Trade Commission. In recent years, FTC hasn’t missed an opportunity to tout its statistical successes to the public and congressional appropriators. In the process of piling up the number of cases brought and fines extracted trumpeted by Chairwoman Edith Ramirez in her resignation press release, however, a critical limitation on FTC’s mission and authority has taken a backseat: the need to prove consumer harm. Continue reading “FTC Must Refocus on Harm to Consumers and Competition”