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There is a basic but important difference between antitrust cases brought by the government and those brought by private parties: All plaintiffs, including government enforcers like the FTC, must prove an antitrust violation, which requires showing harm to competition. But private plaintiffs must make an additional showing: to establish antitrust ‘standing,’ private plaintiffs must prove that the antitrust violation caused harm to them. This distinction is deeply rooted in our system of antitrust enforcement, which permits many types of enforcers but limits standing to those with a cognizable claim of injury. In private cases, the distinction between harm to competition and harm to an individual often seems academic because the private plaintiffs typically attempt to prove harm to competition by showing they were injured. But when courts and litigants miss this doctrinal distinction on the road to resolving a case, it can have significant implications for antitrust law and policy.

This is what happened in the Nexium reverse-payment litigation, the first case to go to trial since the Supreme Court’s decision in FTC v. Actavis. The plaintiffs are purchasers of Nexium—including health insurers, drug wholesalers, and retail pharmacies that bought the drug directly from the manufacturers. The plaintiffs alleged that Nexium’s owner, AstraZeneca Pharmaceuticals, made substantial payments to generic challenger Ranbaxy Laboratories and, in return, Ranbaxy gave up its patent claim and stayed out of the market for six years. After trial, the jury concluded that AstraZeneca had made a large and unjustified reverse payment to Ranbaxy that had an anticompetitive effect. But it also found that the plaintiffs did not prove that AstraZeneca and Ranbaxy would have agreed to an earlier entry date even without the payment. Interpreting the jury’s verdict, the district court held that the plaintiffs had not proved that they actually paid more for Nexium than they otherwise would have, and therefore had not established an antitrust violation.

The FTC recently filed an amicus brief with the Court of Appeals for the First Circuit, where the case is pending on appeal. The brief takes no position on the merits of the case, but instead explains that the district court missed the important distinction between an antitrust violation and an injury-in-fact. Under both the Supreme Court’s 2013 decision in FTC v. Actavis and other longstanding precedent, an antitrust violation requires a general showing of harm to the competitive process, and many courts have found that plaintiffs can prove an antitrust violation without showing that actual prices were higher than they would have been absent the conduct.

Our brief argues that the district court’s analysis threatens to add an unwarranted additional burden to federal antitrust enforcement by requiring the government to show that an agreement is not only anticompetitive in character, but actually caused a specific injury to someone. This additional requirement is particularly inappropriate in the context of a reverse payment, which, the Supreme Court explained, can harm competition by eliminating the risk of potential competition. Preventing uncertain competition is anticompetitive regardless of whether that potential competitor would otherwise have entered the market earlier. The question of whether the conduct actually caused an injury to any particular plaintiff is a separate question that, under longstanding precedent, should remain separate.

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