Abbott Laboratories - Decision & Order

9810395

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS:: Robert Pitofsky, Chairman; Sheila F. Anthony; Mozelle W. Thompson; Orson Swindle; Thomas B. Leary

In the Matter of

ABBOTT LABORATORIES, a corporation.

DOCKET NO. C-3945

DECISION AND ORDER

The Federal Trade Commission ("Commission"), having initiated an investigation of certain acts and practices of Abbott Laboratories (hereinafter referred to as "Respondent Abbott") and Geneva Pharmaceuticals, Inc. ("Geneva"), an indirect wholly-owned subsidiary of Novartis Corporation, and Respondent Abbott having been furnished thereafter with a copy of a draft Complaint which the Bureau of Competition proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge Respondent Abbott with violation of the Federal Trade Commission Act; and

Respondent Abbott and counsel for the Commission having thereafter executed an Agreement Containing Consent Order, an admission by Respondent Abbott of all the jurisdictional facts set forth in the aforesaid draft Complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by Respondent Abbott that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission's Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that Respondent Abbott has violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, and having duly considered the comments filed by interested persons pursuant to Section 2.34 of its Rules, now in further conformity with the procedure described in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Abbott Laboratories is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Illinois, with its office and principal place of business located at 100 Abbott Park Road, Abbott Park, Illinois 60064.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of Respondent Abbott, and the proceeding is in the public interest.

ORDER

IT IS ORDERED that for the purposes of this order, the following definitions shall apply:

A. "Respondent Abbott" means Abbott Laboratories, its directors, officers, employees, agents and representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups, and affiliates controlled by Abbott, and the respective directors, officers, employees, agents and representatives, successors, and assigns of each.

B. "Commission" means the Federal Trade Commission.

C. "180-day Exclusivity Period" means the period of time established by Section 505(j)(5)(B)(iv) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 355(j) et seq.).

D. "Agreement" means anything that would constitute an agreement under Section 1 of the Sherman Act or Section 5 of the Federal Trade Commission Act.

E. "ANDA" means an Abbreviated New Drug Application, as defined under 21 U.S.C. § 355(j) et seq.

F. "ANDA First Filer" means the party whom the FDA determines is entitled to, or eligible for, a right to a 180-day Exclusivity Period which has not yet expired.

G. "Control" means an entity in which Abbott has an interest greater than 50%.

H. "Drug Product" means a finished dosage form (e.g., tablet, capsule, or solution) that contains a drug substance, generally, but not necessarily, in association with one or more other ingredients, as defined in 21 C.F.R. § 314.3(b).

I. "FDA" means the United States Food and Drug Administration.

J. "NDA" means a New Drug Application, as defined under 21 U.S.C. § 355(b) et seq.

K. "NDA Holder" means: (1) the party that received FDA approval to market a Drug Product pursuant to an NDA; (2) a party owning or controlling enforcement of the patent(s) listed in the Approved Drug Products With Therapeutic Equivalence Evaluations (commonly known as the "FDA Orange Book") in connection with the NDA; or (3) the predecessors, subsidiaries, divisions, groups and affiliates controlled by the entities described in subparagraphs (1) and (2) above, as well as the entities' licensees, successors and assigns.

L. "Person" means both natural persons and artificial persons, including, but not limited to, corporations, unincorporated entities, and governments.

M. "Relinquishing" means transferring, selling, assigning, waiving, or relinquishing.

II.

IT IS FURTHER ORDERED that Respondent Abbott cease and desist, either directly or indirectly, in connection with the sale of Drug Products in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44, from being a party to any Agreement in which Respondent Abbott is an NDA Holder for a Drug Product(s), any other party is the ANDA First Filer for the Drug Product(s), and:

A. the ANDA First Filer is prohibited by such Agreement from relinquishing, or is subject to a penalty, forfeiture, or loss of benefit if it relinquishes, its right to the 180-Day Exclusivity Period; or

B. the ANDA First Filer agrees to refrain from researching, developing, manufacturing, marketing, or selling any Drug Product that could be approved for sale by the FDA pursuant to the ANDA and that is not the subject of a court action alleging patent infringement.

Provided, however, that nothing in this Paragraph II prohibits any agreement which restricts the ANDA First Filer's right to relinquish any rights under its ANDA except as set forth above.

III.

IT IS FURTHER ORDERED that, in any instance where Respondent Abbott is a party to a patent infringement action in which it is the NDA Holder, it shall cease and desist, either directly or indirectly, in connection with the sale of Drug Products in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44, from being a party to any Agreement in which the parties do not agree to dismiss the litigation, and in which the NDA Holder provides anything of value to the alleged infringer and the alleged infringer agrees to refrain during part or all of the course of the litigation from selling the Drug Product at issue, or any Drug Product containing the same chemical entity(ies) at issue. Notwithstanding the above, however, such an Agreement is permissible when entered into in conjunction with a joint stipulation between the parties that the court may enter a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure, if: (1) together with the stipulation for a preliminary injunction, Respondent Abbott provides the court with the proposed Agreement, as well as a copy of the Commission's complaint, order, and Analysis to Aid Public Comment in this matter; (2) Respondent Abbott has provided Notification, as described in Paragraph V below, to the Commission at least thirty (30) days prior to submitting the stipulation for a preliminary injunction; (3) Respondent Abbott does not oppose any effort by the Commission to participate, in any capacity permitted by the court, in the court's consideration of any such action for preliminary relief; and (4) the court issues an order which incorporates the terms of the Agreement. Nothing in this Paragraph shall be interpreted to prohibit or restrict the right of Respondent Abbott to unilaterally seek relief from the court, without notice to the Commission, including but not limited to, applying for preliminary injunctive relief or seeking to extend the 30-month stay pursuant to 21 U.S.C. § 355(j)(4)(B)(iii).

IV.

IT IS FURTHER ORDERED that Respondent Abbott shall provide Notification as described in Paragraph V below to the Commission at least thirty (30) days before becoming a party to any Agreement made after the date the Agreement Containing Consent Order is signed where it is the NDA Holder and an ANDA First Filer agrees to refrain from selling any Drug Product under its ANDA for any period of time.

The Notification required by Paragraphs III and IV shall be filed with the Secretary of the Commission and shall include the following information, to the extent known and not subject to any legally recognized privilege: (1) identification of the parties involved in the Agreement; (2) identification of all Drug Products involved in the Agreement; (3) identification of all persons who have filed an ANDA with the FDA (including the status of such application) for any Drug Product containing the same chemical entity(ies) as the Drug Product(s) involved in the Agreement; (4) a copy of the proposed Agreement; (5) identification of the court, and a copy of the docket sheet, for any legal action which involves either party to the Agreement and relates to any Drug Product(s) containing the same chemical entity(ies) involved in the Agreement; and (6) all documents which were prepared by or for any officer(s) or director(s) of Respondent Abbott for the purpose of evaluating or analyzing the Agreement.

VI.

IT IS FURTHER ORDERED that Respondent Abbott shall file a verified written report within sixty (60) days after the date this order becomes final, annually thereafter for five (5) years on the anniversary of the date this order becomes final, and at such other times as the Commission may by written notice require, setting forth in detail the manner and form in which Respondent Abbott intends to comply, is complying, and has complied with this order. Respondent Abbott shall include in its compliance reports, among other things that are required from time to time, a full description of the efforts being made to comply with this order.

VII.

IT IS FURTHER ORDERED that Respondent Abbott shall notify the Commission at least thirty (30) days prior to any proposed change in Respondent Abbott such as dissolution, assignment, sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in Respondent Abbott that may affect compliance obligations arising out of this order.

VIII.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this order and subject to any legally recognized privilege, and upon written request with reasonable notice to Respondent Abbott, Respondent Abbott shall permit any duly authorized representative of the Commission:

A. Access, during office hours and in the presence of counsel, to all facilities, and to inspect and copy all books, ledgers, accounts, correspondence, memoranda, calendars, and other records and documents in its possession or under its control relating to compliance with this order; and

B. To interview officers, directors, employees, agents, and other representatives of Respondent Abbott, who may have counsel present, regarding such compliance issues.

IX.

IT IS FURTHER ORDERED that with respect to any affiliate of Respondent Abbott in which Respondent Abbott owns 50%, but not more than and not less than 50%: (1) Respondent Abbott shall notify all such affiliates of Abbott's obligations under this Order; (2) Respondent Abbott shall not request, solicit, or direct such affiliates to enter into any agreement which, if entered into by Respondent Abbott, would violate the terms of this Order; (3) Respondent Abbott shall not approve any such agreement if it is presented to Respondent Abbott for its approval; (4) Respondent Abbott shall vote against approval if any such agreement is presented to the affiliate's Board of Directors; and (5) in the event any such agreement is not presented to Respondent Abbott or to the affiliate's Board for approval, Respondent Abbott shall notify the Commission if the affiliate enters into any such agreement and Respondent Abbott acquires knowledge thereof.

IT IS FURTHER ORDERED that this order shall terminate on May 22, 2010.

By the Commission.

Donald S. Clark
Secretary

SEAL

ISSUED: May 22, 2000