DOJ/FTC Regulatory Update Regarding Pharmaceutical Companies

The Department of Justice (“DOJ”) and the Federal Trade Commission ( “FTC”) have both taken recent activity, which indicates there will be close scrutiny and enforcement of the pharmaceutical industry.

The DOJ announced on October 1, 2021, that three generic pharmaceutical companies have agreed to pay over $447 million to resolve False Claim Liability for Price Fixing of Generic Drugs. The three companies, Taro Pharmaceuticals USA, Sandoz Inc., and Apotex Corporation resolved claims arising from a large generic price-fixing case that has involved many generic companies and is still pending. The acts of the three companies took place between 2013 and 2015 and involved receiving compensation through arrangements on price, supply, and allocation of customers with other pharmaceutical manufacturers. Some of the drugs involved include etodolac, nystatin-triamcinolone cream, benazepril HCTZ, clobetasol, and pravastatin. The Anti-Kickback Statute prohibits companies from receiving or making payments in return arranging the sale or purchase of items for which payment may be made by a federal healthcare program.¹

With respect to the FTC, President Biden recently appointed Lina M. Khan to be the FTC Chair. Chair Khan has indicated through public statements and actions that the FTC will be very aggressive in pursuing antitrust matters involving pharmaceutical companies (and others).  For example, Chair Khan announced key enforcement priorities and indicated that priority targets include pharmaceutical companies and pharmacy benefits managers. Chair Khan also recently appointed Holly Vedova to serve as Director of the Bureau of Competition.  Ms. Vedova has been with the FTC since 1990 and has also spent two years in private practice as in-house counsel to a large pharmaceutical corporation.

It is clear that both brand and generic companies are facing a regulatory environment which intends to be aggressive. If you have any questions, feel free to reach out to Jeffrey S. Jacobovitz at 202-677-4056 in AGG’s Washington D.C. office.

[1] The Department of Justice, Office of Public Affairs, Justice News, Oct. 1, 2021 at p. 2.