Fed. Trade Comm'n v. Abbvie Inc.
Decision Date | 30 September 2020 |
Docket Number | No. 18-2621, No. 18-2748, No. 18-2758,18-2621 |
Citation | 976 F.3d 327 |
Parties | FEDERAL TRADE COMMISSION, Appellant v. ABBVIE INC; Abbott Laboratories; Unimed Pharmaceuticals, LLC; Besins Healthcare, Inc. ; *Teva Pharmaceuticals USA, Inc (*Dismissed Pursuant to Court's 3/12/19 Order.) Federal Trade Commission, v. AbbVie Inc.; Abbott Laboratories; Unimed Pharmaceuticals, LLC; Besins Healthcare, Inc. ; *Teva Pharmaceuticals USA, Inc. AbbVie Inc.; Abbott Laboratories; Unimed Pharmaceuticals, LLC, Appellants (*Dismissed Pursuant to Court's 3/12/19 Order.) Federal Trade Commission, v. AbbVie Inc.; Abbott Laboratories; Unimed Pharmaceuticals, LLC; Besins Healthcare, Inc. ; *Teva Pharmaceuticals USA, Inc. Besins Healthcare, Inc., Appellant (*Dismissed Pursuant to Court's 3/12/19 Order.) |
Court | U.S. Court of Appeals — Third Circuit |
Mark S. Hegedus, Federal Trade Commission, MS-582, 600 Pennsylvania Avenue, N.W., Washington, DC 20580, Matthew M. Hoffman [Argued], Joel R. Marcus, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, DC 20580, Attorneys for Federal Trade Commission
Brittany Amadi, Catherine M.A. Carroll, Leon B. Greenfield, Seth P. Waxman [Argued], WilmerHale, 1875 Pennsylvania Avenue, N.W., Washington, DC 20006, Elaine J. Goldenberg, Munger Tolles & Olson, 1155 F Street, N.W., 7th Floor, Washington, DC 20004, Adam R. Lawton, Stuart N. Senator, Jeffrey I. Weinberger, Munger Tolles & Olson, 350 South Grand Avenue, 50th Floor, Los Angeles, CA 90071, William F. Lee, WilmerHale, 60 State Street, Boston, MA 02109, Paul H. Saint-Antoine, John S. Yi, Faegre Drinker Biddle & Reath, One Logan Square, Suite 2000, Philadelphia, PA 19103, Attorneys for AbbVie Inc, Abbott Laboratories, and Unimed Pharmaceuticals LLC
Melinda F. Levitt, Gregory E. Neppl [Argued], Foley & Lardner, 3000 K Street, N.W., Suite 600, Washington, DC 20007, Paul H. Saint-Antoine, John S. Yi, Faegre Drinker Biddle & Reath, One Logan Square, Suite 2000, Philadelphia, PA 19103, Attorneys for Besins Healthcare, Inc.
William A. Rivera, AARP Foundation Litigation, B4-230, 601 E Street, N.W., Washington, DC 20049, Attorney for Amici AARP and AARP Foundation
Ilana H. Eisenstein, DLA Piper, 1650 Market Street, One Liberty Place, Suite 5000, Philadelphia, PA 19103, Attorney for Amicus Chamber of Commerce of the United States of America
Bradford J. Badke, Sidley Austin, 787 Seventh Avenue, New York, NY 10019, Attorney for Amicus Amgen Inc
Andrew D. Lazerow, Covington & Burling, 850 10th Street, N.W., One City Center, Washington, DC 20001, Attorney for Amicus Pharmaceutical Research and Manufacturers of America
Richard M. Brunell, Hilliard & Shadowen, 1135 West 6th Street, Suite 125, Austin, TX 78703, Attorney for Amici American Antitrust Institute, Public Citizen Inc, and Public Knowledge
Before: HARDIMAN, PORTER and PHIPPS, Circuit Judges.
A. FDA Approval under the Hatch-Waxman Act...338
B. Patent disputes under the Hatch-Waxman Act...339
C. Therapeutic equivalence ratings...340
D. Hypogonadism and testosterone replacement therapies...340
F. The ’894 patent ’s prosecution history...341
G. AndroGel's competitors...342
H. The lawsuits against Teva and Perrigo...342
I. The settlements with Perrigo and Teva...344
J. Teva and Perrigo's generic versions of AndroGel...345
A. The District Court erred by rejecting the reverse-payment theory...351
B. The District Court erred in concluding AbbVie and Besins's litigation against Teva was a sham; it did not err in concluding the Perrigo litigation was a sham...359
C. The District Court did not err in concluding AbbVie and Besins had monopoly power in the relevant market...371
A. The District Court erred in ordering disgorgement...374
B. The District Court did not abuse its discretion in denying injunctive relief...379
C. Remand on the reverse-payment theory is not futile...381
This appeal involves a patented drug called AndroGel. A blockbuster testosterone replacement therapy that generated billions of dollars in sales, AndroGel caught the attention of the Federal Trade Commission. The FTC sued the owners of an AndroGel patent—AbbVie, Inc., Abbott Laboratories, Unimed Pharmaceuticals LLC, and Besins Healthcare, Inc.—under Section 13(b) of the Federal Trade Commission Act in the United States District Court for the Eastern District of Pennsylvania. The FTC alleged that Defendants filed sham patent infringement suits against Teva Pharmaceuticals USA, Inc. and Perrigo Company, and that AbbVie, Abbott, and Unimed entered into an anticompetitive reverse-payment agreement with Teva. The FTC accused Defendants of trying to monopolize and restrain trade over AndroGel.
The District Court dismissed the FTC's claims to the extent they relied on a reverse-payment theory but found Defendants liable for monopolization on the sham-litigation theory. The Court ordered Defendants to disgorge $448 million in ill-gotten profits but denied the FTC's request for an injunction. The parties cross-appeal.
We hold the District Court erred by rejecting the reverse-payment theory and in concluding Defendants’ litigation against Teva was a sham. The Court did not err, however, in concluding the Perrigo litigation was a sham and that Defendants had monopoly power in the relevant market. Yet the FTC has not shown the monopolization entitles it to any remedy. The Court did not abuse its discretion in denying injunctive relief; and the Court erred by ordering disgorgement because that remedy is unavailable under Section 13(b) of the FTC Act. Accordingly, we will reinstate the FTC's dismissed claims and remand for further proceedings consistent with this opinion. We will also affirm in part and reverse in part the Court's order adjudging Defendants liable for monopolization. Finally, we will affirm the Court's order denying injunctive relief and reverse the Court's order requiring Defendants to disgorge $448 million.
A. FDA Approval under the Hatch-Waxman Act
The Food, Drug, and Cosmetic Act (the FDC Act), 21 U.S.C. § 301 et seq. , empowers the Food and Drug Administration (FDA) to regulate the manufacture and sale of drugs in the United States. Before a pharmaceutical company can market a drug, it must obtain FDA approval. Id. § 355(a). Under the FDC Act, as amended by the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act), 21 U.S.C. § 355 and 35 U.S.C. § 271, a company can apply for FDA approval in one of three ways:
The latter...
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