Doctor concerned with health care law

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

January 24, 2013

French drug developer lacks standing for antitrust claim

By Suzanne Szymonik, JD

A French drug development firm that licensed an American company to market its cholesterol-lowering drug in the United States would not compete in the American market unless and until it acquired Food and Drug Administration (FDA) approval to do so. It thus lacked antitrust standing to sue the marketer of a similar cholesterol drug (Ethypharm S.A. France v Abbott Laboratories, January 23, 2013, Jordan, K). To have antitrust standing, a complainant must be a consumer or a competitor, or, if in the same relevant market, "inextricably intertwined with the defendant's conduct such that its injuries are the means by which the defendant seeks to achieve its anticompetitive ends." The Third Circuit determined that the French firm was not in the American pharmaceutical market.

Background. The French firm, Ethypharm S.A. France (Ethypharm), developed Antara® (fenofibrate) and licensed an American company, Reliant Pharmaceuticals, Inc. (Reliant), to sell the drug in the United States. Reliant obtained FDA marketing approval for the drug, relying not on its own clinical studies but instead on the data of an already approved fenofibrate drug, TriCor®, distributed in the United States by Abbott Laboratories (Abbott). Abbott sued Reliant for patent infringement, and the companies settled their patent dispute with a restrictive agreement foreclosing Reliant from assigning its rights in Antara® to a number of listed, successful domestic drug companies. Reliant ultimately assigned its license to Abbott patents to a firm that was not able to market Antara® successfully and that went bankrupt. Believing that the failure of Antara® to compete with TriCor® was a direct result of Abbott's patent suit against Reliant and of the restrictive marketing agreement, Ethypharm filed an antitrust action against Abbott. The district court granted summary judgment to Abbott after denying Abbott's motion to dismiss due to Ethypharm's lack of standing.

Relevant market. The Third Circuit looked at its previous rulings on antitrust standing and concluded that the appropriate standing test was whether there was "cross-elasticity of demand" between parties' offerings, i.e. whether the parties operated in the same market. Ethypharm did not, and could not, compete with Abbott; in America's highly regulated pharmaceutical market, there was no cross-elasticity of demand between Ethypharm's offerings and Abbott's offerings. Customers in the United States could not purchase fenofibrate from Ethypharm because it structured its business so that only Reliant or someone to whom Reliant sold the rights to Antara® could supply the drug.

Ethypharm chose not to seek the necessary FDA approval to sell pharmaceuticals in the United States and was thus forbidden from competing in the relevant market. Because of its choice to leave to an exclusive licensee the responsibility of obtaining FDA approval for Antara® and of selling and marketing that drug in the United States, there was no cross-elasticity of demand between what Ethypharm could lawfully offer, i.e., bulk drug sales from outside the United States to an FDA-approved entity, and what Abbott offered, a finished pharmaceutical product within the United States.

The appellate court vacated the grant of summary judgment as to Ethypharm's federal claims, left undisturbed the grant of summary judgment as to Ethypharm's state law claims, and remanded the case to the district court to dismiss the federal claims for lack of standing.

The case number is 11-3602.

Attorneys: Carlos T. Angulo (Zuckerman Spaeder) for Ethypharm S.A. France. Sean M. Brennecke (Klehr Harrison Harvey Branzburg) for Abbott Laboratories.

Companies: Ethypharm S.A. France; Abbott Laboratories

MainStory: TopStory AntitrustNews HatchWaxmanNews PrescriptionDrugNews

Health Law Daily

Introducing Wolters Kluwer Health Law Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.

A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.