Tag: Competition

James L. Dolan, Executive Chairman of Madison Square Garden Company, has agreed to pay $609,810 in civil penalties to resolve Federal Trade Commission allegations that he violated the Hart-Scott-Rodino Act by failing to report in a timely manner his acquisition of voting securities in Madison Square Garden Company.

On 2/2/2009, the Commission filed a complaint in federal district court challenging and agreement between Solvay Pharmaceuticals and two generic drug manufacturers in which Solvay paid for the delayed release of generic equivalents to its own testosterone-replacement drug, AndroGel, typically used in the treatment of men with low testosterone levels due to advanced age, certain cancers, and HIV/AIDS. According to the Commission’s complaint, in an effort to prevent Watson Pharmaceuticals and Par Pharmaceuticals from acquiring patents for their competing testosterone replacement drugs, Solvay paid the companies to delay entry for a nine year period, ending in 2015. 

This case was transferred from the United States District Court for the Central District of California to the Northern District of Georgia.  The district court dismissed the Commission's complaint, and the Eleventh Circuit affirmed, holding that anticompetitive effects within the scope of patent protection are per se legal under the antitrust laws.

On 10/4/2012, the FTC filed a writ of certiorari to the Supreme Court.  On June 17, 2013, the Supreme Court reversed the 11th Circuit, rejecting the scope of the patent test and permitting antitrust review of reverse payment patent settlement agreements.

There are three related administrative proceedings:

• Watson Pharmaceuticals / Actavis Inc.
• Watson Pharmaceuticals, Inc., a corporation, and Robin Hood Holdings Limited, a limited liability company
• Watson Pharmaceuticals, Inc. and Andrx Corporation

The FTC's complaint alleges that Endo Pharmaceuticals Inc. and several other drug companies violated antitrust laws by using pay-for-delay settlements to block consumers’ access to lower-cost generic versions of Lidoderm.  The agreement not to market an authorized generic – often called a “no-AG commitment” – is the form of reverse payment.  The FTC’s complaint alleges that Endo paid the first generic companies that filed for FDA approval – Watson Laboratories, Inc. – to eliminate the risk of competition for Lidoderm, in violation of the Federal Trade Commission Act.  Lidoderm is a topical patch used to relieve pain associated with post-herpetic neuralgia, a complication of shingles.  Under federal law, the first generic applicant to challenge a branded pharmaceutical’s patent, referred to as the first filer, may be entitled to 180 days of exclusivity as against any other generic applicant upon final FDA approval. But a branded drug manufacturer is permitted to market an authorized generic version of its own brand product at any time, including during the 180 days after the first generic competitor enters the market. According to the FTC, a no-AG commitment can be extremely valuable to the first-filer generic, because it ensures that this company will capture all generic sales and be able to charge higher prices during the exclusivity period.  The FTC is seeking a court judgment declaring that the defendants’ conduct violates the antitrust laws, ordering the companies to disgorge their ill-gotten gains, and permanently barring them from engaging in similar anticompetitive behavior in the future.

Endo agreed to settle the charges in a proposed stipulated order to be entered by the court.

Koninklijke Ahold and Delhaize Group, which together own and operate five well-known U.S. supermarket chains, have agreed to sell 81 stores to settle charges that their proposed $28 billion merger would likely be anticompetitive in 46 local markets in Delaware, Maryland, Massachusetts, New York, Pennsylvania, Virginia, and West Virginia. Ahold operated 760 supermarkets under the Stop & Shop, Giant, and Martin’s banners in ten Eastern states and the District of Columbia.Delhaize operated 1,291 supermarkets under the Food Lion and Hannaford banners in 14 Eastern and Southern states. Under the proposed consent agreement, Ahold and Delhaize will divest a total of 81 stores to seven divestiture buyers.

The FTC required casino operators Penn National Gaming, Inc. and Pinnacle Entertainment, Inc. to divest casino-related assets in three Midwestern cities to  resolves charges that Penn’s $2.8 billion agreement to acquire Pinnacle likely would be anticompetitive. The complaint alleges that the proposed acquisition would harm competition for casino services in metropolitan St. Louis, Missouri; Kansas City, Missouri; and Cincinnati, Ohio. Casino services include gaming services such as slots and table games, as well as related lodging, entertainment, and food and beverage services, according to the complaint. Typically, casino operators generate the vast majority of their revenues from gaming. Casinos are highly regulated, with a limited number of licenses granted in any given state, as well as age restrictions on who can gamble. According to the complaint, the acquisition, if consummated, likely would eliminate direct competition between Penn and Pinnacle, increasing the likelihood that Penn would unilaterally exercise market power, and lead to higher prices and reduced quality for consumers of casino services.