Morgenstern Speaks with Global Competition Review on FTC’s Recent Exclusive Drug Licensing Settlement
Antitrust Practice chair and Litigation partner Saul Morgenstern was quoted extensively in Global Competition Review regarding the Federal Trade Commission’s recent settlements with pharmaceutical companies Concordia and Par around their non-compete pact.
Morgenstern’s commentary opened with discussion of a prior case, Actavis. He explains that Actavis’ settlement, which came before Par or Concordia publicly defended its conduct, gives little guidance to businesses – and that the few facts available are potentially also compatible with a legitimate joint venture.
“It is perfectly common for people who own a brand name or other intellectual property to license it on exclusive terms. That is entirely lawful, and antitrust law going back to the 1920s has recognized that,” he said.
Morgenstern also stated that the Concordia case says nothing useful about Actavis, but does indicate that the FTC is willing to look closely at a licensing arrangement to make sure there’s sufficient procompetitive aspect of the agreement to balance whatever the restraint is.
“I have seen companies license to generic drugmakers, and provide them with manufacturing assistance and help them get on the market, and in general it’s not unusual for a generic company in that situation to say, ‘If I’m going to give you money to do this, I don’t want you undercutting me with your own authorized generic,’” he added.
The paucity of details – before the agreement, was Par planning to launch? And was Concordia, a branded pharmaceutical company, planning to issue an authorized generic? – leaves practitioners unable to draw sensible inferences about the meaning of the settlement, he concluded.
“This doesn’t provide much guidance to anybody about anything,” Morgenstern said. “Settlements are not the law, and rarely provide much useful guidance to other businesses in trying to gauge their behavior.”