Antitrust

8 6 With lifecycle management strategies like new product innovations, adjusting dosage or delivery for safety, efficacy, and patient compliance, and modifying the mode of action, pharmaceutical companies may successfully create a franchise that outlasts the original innovation. The Federal Trade Commission (FTC), state attorneys general, and private class actions have sought (with modest success) to use antitrust theories of harm to interfere with these lifecycle management strategies. OVERVIEW OF LIFECYCLE MANAGEMENT The Hatch-Waxman Act and principles of patent law provide innovators with a proscribed period of exclusivity as a reward for their invention and as a way to incentivize further innovation in pharmaceuticals. These exclusivity provisions, as contemplated by the statutory structure, permit incremental innovation and do not draw a line between ground breaking change and relatively minor (yet important) tweaks for patient safety, efficacy, and compliance concerns — instead, encouraging all innovation in pharmaceutical product development. As generic companies file for (and receive) approval to launch in direct competition with their branded counterparts, brands face the reality that state automatic substitution laws allow or require pharmacists to switch out the brand for the generic at the pharmacy, and that insurance companies drastically reduce the co-pays due at the pharmacy for generic drugs, which effectively increases the cost for any consumers who still may want to use the brand. A brand that can somehow limit the impact of these triggers can create a lasting revenue stream. Branded pharmaceutical companies may develop lifecycle management strategies to create new, iterative, and innovative versions of existing drugs nearing the end of their exclusivity window that can be protected from generic competition by new patents and new regulatory exclusivity. These strategies often leverage the goodwill created through the success of the original brand. Providers may change their prescribing habits and switch patients from the soon- to-be-generic market to a brand-exclusive market — a practice that antitrust enforcers and private plaintiffs call 'product hopping.' This switch minimizes price and market share erosion for the brand. Especially in light of government and private plaintiff challenges, the question becomes whether or at what point these actions may contravene the antitrust laws. COMPLIANCE 16 B R A N D S F A C E T H E R E A L I T Y T H A T S T A T E A U T O M A T I C S U B S T I T U T I O N L A W S A L L O W O R R E Q U I R E P H A R M A C I S T S T O S W I T C H O U T T H E B R A N D F O R T H E G E N E R I C A T T H E P H A R M A C Y Moving Past Actavis with Evolving Lifecycle Management Strategies

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