US FTC files amicus brief explaining that pharma “product hopping” can violate antitrust laws

The US Federal Trade Commission has filed an amicus brief before the US Court of Appeals for the Third Circuit explaining that the district court made significant analytical errors in ruling for defendants in a dispute involving allegations of pharmaceutical “product hopping.”

The brief explains that, in examining whether such conduct is unlawful, courts should account for the unique aspects of the pharmaceutical marketplace, including the nature of competition between branded pharmaceutical products and their generic counterparts.

Generic competition through state automatic substitution laws saves American consumers billions of dollars each year. Brand-name pharmaceutical companies can avoid this competition and preserve monopoly profits by combining minor product reformulations with efforts to damage or destroy the market for the original formulation. This tactic, commonly called product hopping, can harm consumers.

Can impede competition from would-be generic entrants