Recent decisions in two different antitrust cases involving price increases and marketing practices for the EpiPen address a relationship solidly embedded in the current architecture of pharmaceutical drug markets: payments between manufacturers and pharmacy benefit managers (“PBMs”) hired by health plans to manage prescription drug programs. These new rulings suggest that while certain manufacturer rebates have come under increased scrutiny in recent years, the standard industry practice remains on firm footing.
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Antitrust Update Blog is a source of insights, information and analysis on criminal and civil antitrust and competition-related issues. Patterson Belknap’s antitrust lawyers represent clients in antitrust litigation and counseling matters, including those related to pricing, marketing, distribution, franchising, and joint ventures and other strategic alliances. We have significant experience with government civil and criminal/cartel investigations, providing the unique perspectives of former top U.S. Department of Justice Antitrust Division lawyers from both the civil and criminal sides.
Does HHS’s Elimination of the Safe Harbor for Manufacturer Rebates Leave Manufacturers with Increased Antitrust Risk?
On November 20, 2020, the U.S. Department of Health & Human Services (HHS) finalized a rule to take effect in 2022, which eliminates the safe harbor under the federal anti-kickback statute for manufacturer rebates to Medicare Part D plan sponsors. Under the current statutory scheme, drug manufacturers may negotiate rebates with providers of pharmacy benefits—either directly or through a pharmacy benefit manager (PBM)—in exchange for preferential placement or avoiding being disadvantaged on a PBM’s or provider’s drug formulary. The safe harbor permits such payments by confirming that rebates do not constitute illegal kickbacks under the federal statute. HHS’s new rule eliminates that safe harbor, but creates a safe harbor for negotiated discounts on the “list price” of the drug..
In Long-Awaited Opinion, Court Rules That Keurig Must Face Antitrust Suits by Competitors and Customers
In a recently unsealed opinion, U.S. District Judge Broderick (S.D.N.Y.) explained his reasoning for allowing a consolidated antitrust suit to proceed against Keurig Green Mountain, Inc. and its affiliates, the makers of single serve brewer machines and compatible single serve coffee packets, “K-Cups.” As discussed below, the case may influence future cases involving exclusive licensing agreements and allegedly false marketing tactics.
On March 27, 2018, the Third Circuit affirmed dismissal of an antitrust suit against Uber Technologies, Inc. (“Uber”) by the Philadelphia Taxi Association and its members, individual taxicab companies (together, “Plaintiffs”). In essence, the Third Circuit held that, based on Plaintiffs’ allegations, federal antitrust laws do not reach Uber’s alleged violation of state and local taxicab regulations and that its entrance into the Philadelphia taxicab market created more competition, not less.
A federal judge has granted preliminary approval of Southwest Airlines Co.’s settlement with a class of plaintiffs alleging antitrust violations against Southwest, American Airlines, Inc., Delta Air Lines, Inc., and United Airlines, Inc.