FTC Submits Amicus In Mylan v. Celgene, Citing Potential Refusal To Deal Concerns

The FTC has submitted an amicus brief in Mylan Pharmaceuticals Inc. v. Celgene Corp., 2:14-CV-2094 (D.N.J.), offering support in favor of Mylan's claims. Mylan sued Celgene in April 2014, bringing claims related to its attempts to develop generic versions of Revlimid and Thalomid, brand drugs used to treat certain forms of cancer. Due to safety concerns, the FDA required Celgene to adopt Risk Evaluation and Mitigation Strategies ("REMS") that limit their distribution. As a result, Mylan claims that it cannot purchase any of the drugs through distributors, and that Celgene has refused to sell any amounts of the drugs directly. Without samples, Mylan cannot perform the bioequivalence testing necessary for Abbreviated New Drug Applications. Mylan alleges that Celgene's use of REMS to deny it access to the drugs is pretextual, and are designed to prevent any generic entrants. Mylan's complaint contains claims for violation of Section 2 of the Sherman Act by Celgene under monopolization and refusal to deal theories, Section 1 of the Sherman Act and Sections 15 and 26 of the Clayton Act for conspiracy between Celgene and its distributors in restraint of trade, and violations of the New Jersey Antitrust Act. Celgene has moved to dismiss.

The FTC, arguing that it has an interest in disputes which concern restrictions on the entry of generic drugs into the market, argues that the antitrust laws are applicable to the dispute. While recognizing that one of the purposes of the Hatch-Waxman Act is to maintain incentives for innovation, it also argues another purpose is to promote generic competition and that "[d]istribution restrictions associated with a REMS can, in fact, raise serious competitive concerns."

With respect to the Section 2 claims, the FTC argues that Mylan's theory fits within the Supreme Court's decision in Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) and Otter Tail Power Co. v. United States, 410 U.S. 366 (1973), arguing that Celgene's refusal to sell samples of its product to Mylan deprives it of an essential service or product, like Otter Tail's refusal to allow other towns to use its power transmission network or Aspen Skiing Co's refusal to participate in a joint lift ticket (or sell its own tickets to Highlands at retail price). The FTC argues that under this precedent, a refusal to deal can be inappropriate where it impairs the opportunities of rivals or does not further competition on the merits.

...