US Generic Drug Litigation Update

Abstract

The Hatch–Waxman Act produced the unintended consequence of allowing brand name and generic drug companies to agree, in exchange for substantial payments, for the generic drug companies to drop their patent challenges and not to bring their generic versions to market. This paper summarises three recent court decisions. In each case, the plaintiffs were the purchasers of the generic drugs — both consumers and insurance companies. They challenged the drug companies' agreements not to compete, claiming antitrust violations. The drug companies defended the agreements as legal uses of their patent monopolies. Each court analysed the agreement differently, demonstrating the novel and complex issues that these cases raise.

Keywords

Hatch-Waxman Act antitrust monopoly patent agreement not to compete

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References

The Drug Price Competition and Patent Term Restoration Act of 1984, 21 USC §355, is known as the ‘Hatch–Waxman Act’.

The FTC authored two extensive studies on the matter: see FTC (2003) ‘To promote innovation: The proper balance of competition and patent law and policy — A report by the Federal Trade Commission’, Federal Trade Commission, October (available at http://www.ftc.gov/os/2003/10/innovationrpt.pdf); and FTC (2002) ‘Generic drug entry prior to patent expiration: An FTC study’, Federal Trade Commission, July (available at www.ftc.gov/os/2002/07/genericdrugstudy.pdf).

See, eg, Morton Salt Co. v G.S. Suppiger Co., 314 US 488 (1942).

332 F.3d 896, 901 (6th Circuit, 2003).

Ibid at 902.

Ibid at 902–903.

Ibid at 903.

Ibid at 904.

Ibid at 905.

10.

Ibid at 908.

11.

344 F.3d 1294, 1298 (11th Circuit, 2003).

12.

Ibid at 1299.

13.

Ibid at 1300.

14.

Ibid at 1304.

15.

Ibid at 1305.

16.

Ibid at 1306.

17.

Ibid at 1309.

18.

Ibid at 1309–1310.

19.

Ibid at 1310–1311.

20.

261 F. Supp. 2d 188, 255 (EDNY 2003).

21.

Ibid at 256.

22.

Ibid at 257.