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The Federal Trade Commission filed an amicus brief in the U.S. Court of Appeals for the First Circuit urging the court to correct the district court’s holding that a plaintiff must prove an injury-in-fact in order to establish an antitrust violation.

The amicus brief, which was filed in the case of Nexium (Esomeprazole) Antitrust Litigation, on appeal from the United States District Court for the District of Massachusetts, explains that, under both the Supreme Court’s 2013 decision in FTC v. Actavis and other long-established antitrust precedent, the existence of an antitrust violation – which requires a general showing of harm to the competitive process – is distinct from the question of antitrust standing, which requires the plaintiff to show that it suffered an injury-in-fact caused by the violation. This distinction has important implications for federal antitrust enforcers, who do not need to prove antitrust standing to prevail, according to the brief.

The brief also explains that a reverse payment from a brand-name drugmaker that is used to settle patent litigation can violate the antitrust laws if it induces a generic drugmaker to abandon its patent challenge and stay out of the market – regardless of whether the generic would actually have otherwise entered the market sooner than permitted by the settlement agreement.

The underlying case concerns allegations that AstraZeneca Pharmaceuticals made a substantial payment to generic challenger Ranbaxy Laboratories to induce Ranbaxy to abandon its patent challenge and refrain from selling generic Nexium for six years. After a trial, the jury concluded that AstraZeneca made a large and unjustified reverse payment to Ranbaxy that had an anticompetitive effect.

But the jury also concluded that the plaintiffs had not established that Ranbaxy would have entered the market earlier in the absence of the payment. Since the plaintiffs had not proved that they actually paid more for Nexium than they otherwise would have, the court held that they had not established an antitrust violation.

The FTC vote approving the amicus brief filing was 4-0. It was filed with the U.S. Court of Appeals for the First Circuit on February 12, 2016. (FTC File No P082105; the staff contact is Mark Hegedus, Office of the General Counsel, 202-326-2115.)

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