Dismissal of Antitrust Lawsuit in Pharmaceutical Industry

In January 2013, the firm secured the dismissal of a multi-million dollar federal antitrust lawsuit against our client, a Fortune 500 pharmaceutical manufacturer. The U.S. Court of Appeals for the Third Circuit found that the plaintiff pharmaceutical manufacturer did not have the antitrust injury that is necessary for antitrust standing under Sections 1 and 2 of the Sherman Act.

Our client was the owner of the U.S. New Drug Application for a prescription medicine and was the seller of that medicine in the U.S. The plaintiff was a non-U.S. manufacturer of a competing prescription medicine that was sold under license in the U.S. The plaintiff's antitrust claims were based in part on a 2006 patent litigation settlement agreement between the firm's client and plaintiff's licensee.

On plaintiff's appeal to the Third Circuit of the antitrust claims based on the 2006 settlement, we successfully argued that an ex-U.S. pharmaceutical manufacturer that had licensed a U.S. company to apply for and own the New Drug Application for the foreign manufacturer's medicine was not a competitor of the firm's client for purposes of establishing an antitrust injury. In the highly regulated pharmaceutical industry, plaintiff's decision not to own the New Drug Application precluded it from being a lawful competitor until such time that it becomes the owner of the Application. In addition, the plaintiff's alleged injuries (lost sales of active ingredient to its licensee and royalties on its licensee's U.S. sales) were not the means by which the allegedly anticompetitive effects in the U.S. were achieved. Accordingly, no exception to the general "customer or competitor" rule for antitrust injury was available to plaintiff.