Brief for the American Antitrust Institute As Amicus Curiae in Support of Petition for Rehearing and Rehearing En Banc
U.S. Court of Appeals for Third Circuit
16 Pages Posted: 20 Oct 2016
Date Written: October 19, 2016
In Mylan v. Warner Chilcott, a Third Circuit panel offered a highly questionable decision on “product hopping,” by which a pharmaceutical company switches from one version of a drug to another.
Mylan offered a simple and compelling anticompetitive story: (1) defendants were the exclusive sellers of an unpatented branded drug; (2) when generics appeared on the horizon, they introduced a minor modification of the drug and removed the older version from the market to delay generic entry (and did this several times); (3) when generic entry finally occurred against a version of the drug that defendants could not hop away from, prices fell sharply; and (4) had the product hops not occurred, Mylan (and other generics) would have entered much sooner, prices would have fallen much sooner, and consumers (and third-party payors) would have obtained the benefits of the lower prices.
Despite this significant evidence of anticompetitive conduct, the court granted summary judgment for defendants, issuing erroneous rulings on monopoly power and (in dicta) exclusionary conduct. The panel misapplied standard monopoly-power law, misconstrued Third Circuit law in requiring complete foreclosure rather than foreclosure from the most cost-effective means of distribution; failed to pay sufficient attention to the regulatory regime; and offered a decision that conflicted with the other appellate decision on product hopping, the 2nd Circuit’s “Namenda” decision.
This brief seeks a rehearing en banc in the Third Circuit or, at a minimum, the panel’s withdrawal of the exclusionary-conduct section of the opinion.
Keywords: product hopping, antitrust, patent, drugs, pharmaceuticals, Mylan, Warner Chilcott, Namenda
JEL Classification: I18, K21, L40, L41, L43, L65, O34, O38
Suggested Citation: Suggested Citation