FTC Stretches its Review Arm into Biopharmaceutical Licensing
The long arm of the Federal Trade Commission (FTC) is about to stretch even further into biopharma business.
The commission is proposing amendments to its premerger notification rules that would make transfers of "all commercially significant rights" to drug, biologic and in vitro diagnostic patents subject to antitrust review.
By broadening the language of transfers that must be reported to the FTC and the Department of Justice, the commission said it is changing the antitrust focus from how the rights are transferred to what is being transferred.
As a result, "any transfer of exclusive rights to a patent in the pharmaceutical industry is a potentially reportable event, regardless of whether this transfer is called an exclusive license or something else," the FTC said.
One of the biggest changes under the proposed amendments is the weight given, or lack thereof, to manufacturing rights in determining whether exclusive patent rights are being transferred. Currently, license agreements in which the licensor retains manufacturing rights but transfers all other exclusive rights within a therapeutic area to someone else are not considered reportable under the Hart Scott Rodino Act.
However, such agreements would become "potentially reportable asset acquisitions" under the proposed rule change, since the licensor is manufacturing solely for the company that has the commercialization rights for a therapeutic area. "In licensing arrangements in the pharmaceutical industry, the right to manufacture is far less important than the right to commercialize," the FTC said.
The rule change would only apply to the biopharma industry, which "presents a unique incentive for the use of exclusive licenses," according to the commission. Recognizing that the changes could increase the regulatory burden for biopharma firms, the FTC said the benefits will outweigh that burden. The commission identified two benefits: clarification of the analysis used to determine the reportability of license transfers, and the opportunity for the FTC and DOJ to review more biopharma license transfers for antitrust issues. The FTC will accept public comments on the proposed changes through Oct. 25.
FTC: No-AG a No-Go
An agreement not to launch an authorized generic (AG) drug is just a pay-for-delay settlement by another name, the FTC said in an amicus brief filed with the U.S. District Court for the District of New Jersey.
In a no-AG patent settlement, the brand company essentially pays a generic drugmaker to delay the launch of its generic by agreeing not to market a competing authorized generic, the FTC claimed in the brief.
Since it is a payment, the FTC said a no-AG commitment would fall under the recent K-Dur ruling by the U.S. Court of Appeals for the Third Circuit, which held that "a court considering an antitrust challenge to a Hatch Waxman patent settlement 'must treat any payment from a patent holder to a generic patent challenger who agrees to delay entry into the market as prima facie evidence of an unreasonable restraint of trade.'" (See BioWorld Today, July 18, 2012.)
"Allowing pharmaceutical companies to sidestep the K-Dur rule by simply making noncash payments would elevate form over substance, in direct contravention to the K-Dur court's instruction to credit 'the economic realities of the reverse payment settlement rather than the labels applied by the settling parties,"' the FTC said.
The commission's brief was filed in conjunction with In re: Effexor XR Antitrust Litigation, a private antitrust action challenging an alleged no-AG agreement between Wyeth (now part of Pfizer Inc.) and Teva Pharmaceuticals Inc. The suit involves a 2005 settlement that included an exclusivity provision in which Wyeth effectively agreed not to market an authorized generic of its blockbuster antidepressant Effexor XR (venlafaxine) and Teva agreed to delay its generic for five years.
Trials to Assess Suicidality
Assessing suicidal thoughts and behavior will be an added requirement in clinical trials of several investigational drugs under a draft guidance the FDA released this week.
"Prospective suicidal ideation and behavior assessments should be carried out in all clinical trials involving any drug being developed for any psychiatric indication, as well as for all antiepileptic drugs and other neurologic drugs with central nervous system . . . activity, both inpatient and outpatient, including multiple-dose Phase I trials involving healthy volunteers," the FDA said in the draft, which revises a 2010 proposed guidance on the subject.
The guidance encourages sponsors to actively query patients about the occurrence of suicidal thinking and behavior, rather than relying on them to report such occurrences spontaneously. The FDA advised following such queries with a retrospective classification of suicidal events into appropriate categories.
Comments on the guidance are due by Oct. 14.
Suite: 1100 | Atlanta, Georgia 30346, USA
In the U.S. and Canada: 1-800-477-6307
Outside the U.S.: 1-770-810-3144
In the U.S. and Canada: 1-800-336-4474
Outside the U.S.: 1-215-386-0100
Hours: Monday - Thursday, 8:30 am - 6:00 pm EST
Friday, 8:30am - 4:30 pm EST
Sign up for Perspectives FREE e-mail newsletter