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FTC v Amgen: The Economics of Bundled Discounts, Part One

TOTM The Federal Trade Commission (FTC) recently announced that it would seek to block Amgen’s proposed $27.8 billion acquisition of Horizon Therapeutics. The move was the culmination of . . .

The Federal Trade Commission (FTC) recently announced that it would seek to block Amgen’s proposed $27.8 billion acquisition of Horizon Therapeutics. The move was the culmination of several years’ worth of increased scrutiny from both Congress and the FTC into antitrust issues in the biopharmaceutical industry. While the FTC’s move didn’t elicit much public comment, it raised considerable alarm in various corners of the biopharmaceutical industry—specifically, that it would chill beneficial biopharmaceutical M&A activity.

This piece, which aims to shed light on the FTC’s theory of the harm in the case and its consequences for the industry, will be divided into two parts. This first post will discuss the overall biopharmaceutical market and the FTC’s stated theory of harm. In a subsequent post, I will dive more deeply into the economic theories that underpin the case and the risk-benefit tradeoff inherent in the FTCs decision to challenge the merger.

Read the full piece here.

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Antitrust & Consumer Protection

Adam Mossoff on Section 1498

Presentations & Interviews ICLE Academic Affiliate Adam Mossoff took part in a webinar hosted by the Council for Innovation Promotion on the use of Title 28 of the . . .

ICLE Academic Affiliate Adam Mossoff took part in a webinar hosted by the Council for Innovation Promotion on the use of Title 28 of the U.S. Code, Section 1498(a), in light of  a recent U.S. government statement of interest filed in a patent-infringement suit against Moderna, Inc.’s COVID-19 vaccine. Video of the full event is embedded below.

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Innovation & the New Economy

When Bad Antitrust Costs Lives: The Illumina/GRAIL Tragedy

TOTM Regrettably, but not unexpectedly, the Federal Trade Commission (FTC) yesterday threw out a reasoned decision by its administrative law judge and ordered DNA-sequencing provider Illumina Inc. to . . .

Regrettably, but not unexpectedly, the Federal Trade Commission (FTC) yesterday threw out a reasoned decision by its administrative law judge and ordered DNA-sequencing provider Illumina Inc. to divest GRAIL Inc., makers of a multi-cancer early detection (MCED) test.

Read the full piece here.

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Antitrust & Consumer Protection

Misusing a Decades-Old Law Isn’t the Way to Lower Drug Prices

Popular Media More than two dozen members of Congress recently petitioned the Biden administration to upend America’s patent system – a move that could wreck our economy . . .

More than two dozen members of Congress recently petitioned the Biden administration to upend America’s patent system – a move that could wreck our economy and deprive consumers of life-enhancing new inventions.

Read the full piece here.

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Intellectual Property & Licensing

The False Promise of Breaking Patents to Lower Drug Prices

Scholarship Abstract Congressional leaders, policy activists, and scholars contend that patents are a principal cause of rising drug prices. They argue that a solution exists in . . .

Abstract

Congressional leaders, policy activists, and scholars contend that patents are a principal cause of rising drug prices. They argue that a solution exists in two federal statutes that allegedly authorize agencies to impose price controls on drug patents: 28 U.S.C. § 1498 and the Bayh-Dole Act. These “price-control theories of § 1498 and the Bayh-Dole Act” maintain that Congress has already endorsed the unprecedented and controversial policy of breaking patents to lower drug prices in private transactions in the healthcare market.

Neither § 1498 nor the Bayh-Dole Act authorize agencies to impose price controls, as confirmed by their plain text and by their interpretation by courts and agencies. Section 1498 is an eminent domain statute that applies only when a patent is used by and for the government, such for the military, the Post Office, or the Veterans Administration. The Bayh-Dole Act promotes commercialization of patented inventions derived from federal funding of upstream research; consistent with this commercialization function, this law specifies four delimited conditions when a federal agency may “march in” and license a patent when a patented product is not sold or available in the marketplace. Applying canons of statutory interpretation, the meaning of these two statutes is clear. Neither specifies that “price” triggers regulatory controls over private market transactions. Congress knows how to enact price-control laws, such as the Emergency Price Control Act of 1942 or when it specifies “reasonable price” as a goal of legislation. The price-control theories of § 1498 and the Bayh-Dole Act profess unprecedented agency powers lacking any authorization in existing statutes. Yet academic scholarship, as well as policy and legal work based on this scholarship, continue to promote the price-control theories of § 1498 and the Bayh-Dole Act. These are policy arguments masquerading as statutory construction.

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Intellectual Property & Licensing

COVID-19 Vaccines Show the Patent System Works

TOTM ICLE President Geoffrey Manne and Director of Innovation Policy Kristian Stout's latest post on Truth on the Market about how the successful COVID-19 vaccine trials demonstrate the value of the patent system.

With the COVID-19 vaccine made by Moderna joining the one from Pfizer and BioNTech in gaining approval from the U.S. Food and Drug Administration, it should be time to celebrate the U.S. system of pharmaceutical development. The system’s incentives—notably granting patent rights to firms that invest in new and novel discoveries—have worked to an astonishing degree, producing not just one but as many as three or four effective approaches to end a viral pandemic that, just a year ago, was completely unknown.

Read the full piece here.

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Intellectual Property & Licensing

In the race for a COVID-19 vaccine, how do we balance risk and safety?

TOTM No matter your Twitter feed, “vaccines have been one of the greatest public health tools to prevent disease,” as The New York Times explained in . . .

No matter your Twitter feed, “vaccines have been one of the greatest public health tools to prevent disease,” as The New York Times explained in January…

Many are terrified that the Food and Drug Administration may hastily authorize injections into hundreds of millions. The FDA and drugmakers are trying to assuage such concerns with enhanced commitments to safety. Nonetheless, fears have been stoked by President Donald Trump’s infomercial-style endorsement of hydroxychloroquine as a COVID-19 remedy, his foolhardy disdain for face masks and campaign rally boasts of a preelection cure.

Read the full piece here.

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Innovation & the New Economy

Policy Diversity Saves Lives: Unmasking Confirmation Bias Caused by a Virus

TOTM The brutal toll of the coronavirus pandemic has delivered dramatic public policies. The United States has closed institutions, banned crowds, postponed non-emergency medical procedures and . . .

The brutal toll of the coronavirus pandemic has delivered dramatic public policies. The United States has closed institutions, banned crowds, postponed non-emergency medical procedures and instituted social distancing. All to “flatten the curve” of illness. The measures are expensive, but there is no obvious way to better save lives.

Read the full piece here.

 

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Innovation & the New Economy

Applying Harm Reduction to Smoking

TOTM Abstinence approaches work exceedingly well on an individual level but continue to fail when applied to populations. We can see this in several areas: teen . . .

Abstinence approaches work exceedingly well on an individual level but continue to fail when applied to populations. We can see this in several areas: teen pregnancy; continued drug use regardless of severe criminal penalties; and high smoking rates in vulnerable populations, despite targeted efforts to prevent youth and adult uptake.

Read the full piece here.

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Innovation & the New Economy