Tag Archives: antitrust

Generic and Branded Drugs

This is an interesting case that the Supreme Court will hear today.  Does a branded drug maker, faced with a potential competitor who makes generic drugs, act illegally if it pays money to the competitor in a deal that postpones the sale of the generic drug for a period of years?

The FTC says it is unlawful, while the generic and branded drug makers disagree.

So why does this matter?  Everyone knows that generic drugs are cheaper than branded drugs.  As the NY Times reported, “73 percent of consumer spending” is spent on branded drugs.  When a generic drug, which costs about 15% of the branded drug cost, enters the market, branded drug makers lose about 90% of their profits.

In FTC v. Actavis, Inc., the 11th Circuit Court of Appeals held companies holding the patent to the branded drug could make those payments to the generic drug maker.  In this case, the generic drug maker challenged the patent of the branded drug maker in court.  Both drug makers came to a settlement, whereby the generic would get some payment as long as the branded drug maker could continue to sell its branded drug exclusively for a time period.

In sum, the 11th Circuit reasoned, “absent sham litigation or fraud” when the anticompetitive effects of a patent fell within that scope, there is no antitrust claim. Further, since there was a settlement, the 11th Circuit stated that it would be hard to predict what the effect would have been.  And since the settlement was with one generic drug maker, this did not impact other generic drug makers from selling the generic version of the drug.

Now, the Supreme Court has to decide on this issue.

via Generic-Brand Name Drug Case Goes to Supreme Court – NYTimes.com.

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NHL sues NHL player’s union

The National Hockey League, as well as all of its teams, sued the NHL players’ union.  The NHL’s federal complaint alleges that the union is engaging in an impermissible bargaining tactic by allegedly threatening to file an antitrust lawsuit.

The NHL’s complaint further states,

In recent days, many union members have publicly asserted that they intend to decertify the union, or vote in favor of the union’s renouncing or ‘disclaiming interest’ in its role as the exclusive bargaining representative of NHL players, an impermissible bargaining tactic defendants mistakenly believe would enable them to commence an antitrust lawsuit challenging the legality of the NHL’s ongoing lockout of NHL players and thereby to pressure the NHL to accede to the union’s preferred outcome in collective bargaining.

Last night [Thursday, Dec. 13], the NHLPA Executive Committee authorized that a vote be taken over the next four days on whether to authorize the union’s leadership to disclaim interest in its role as the exclusive bargaining representative of NHL players so that the NHL players could commence antitrust litigation against the NHL in order to secure a more favorable collective bargaining agreement.

The union’s improper threats of antitrust litigation are having a direct, immediate and harmful effect upon the ability of the parties to negotiate a new collective bargaining agreement.

The NHL therefore seeks a declaration that the NHL’s ongoing lockout, which is lawful as a matter of federal labor law, does not violate the antitrust laws, and as such, can neither be enjoined nor result in any legally cognizable or compensable damages to defendants.

NHL’s complaint further alleges “that the Norris-LaGuardia Act deprives the federal courts of jurisdiction to enjoin or restrain the ongoing lockout without regard to any purported disclaimer by the NHLPA;” that the lockout is legal under the Clayton Antitrust Act, “and thus does not result in any legally cognizable or compensable damages to NHL players;” and five other claims, all similar to the second one.

via Courthouse News Service.

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NFL lockout case

As reported by the ABA,

A federal appeals court is allowing the lockout by the National Football League in a ruling that overturns a preliminary injunction.

The St. Louis-based 8th U.S. Circuit Court of Appeals ruled Friday that the injunction could not be granted under the Norris-LaGuardia Act, which restricts the power of courts to issue injunctions in labor disputes.

U.S. District Judge Susan Richard Nelson had ruled the law does not apply because the players had decertified the union. The appeals court disagreed in a 2-1 decision. “The text of the Norris-LaGuardia Act and the cases interpreting the term ‘labor dispute’ do not require the present existence of a union to establish a labor dispute,” the majority opinion (PDF) said.

The decision “did not radically alter the dynamics” of the labor negotiations, the New York Times reports in a story comparing the NFL lockout to the “surprisingly subdued” lockout by the National Basketball Association. “If anything, several legal experts said, the decision merely affirmed the 8th Circuit’s conservative reputation—and underscored why the NBA players union should seek a different court if it files an antitrust lawsuit,” the Times says.

The Washington Post, the Kansas City Star and How Appealing also have coverage. According to the Post, the timing of the ruling was surprising, since the 8th Circuit had already stayed Nelson’s injunction and progress is being made in negotiations.

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