Effects of the Federal Trade Commission's Repeal of Non-Compete Agreements on the Pharma Industry

In an interview with Associate Editor Donald Tracy, MA, Ron Lanton III, Esq., Partner, Lanton Law offers his thoughts on the recent Federal Trade Commission (FTC) repeal of non-compete agreements, and how it could effect the #pharma industry.

The interview can be viewedhere.

FTC, DOJ and HHS Extend RFI on Private Equity Control in Health Care Markets

The Federal Trade Commission, the Department of Justice’s (DOJ) Antitrust Division, and the U.S. Department of Health and Human Services (HHS) are extending the deadline by 30 days for the public to comment on a tri-agency Request for Information (RFI) examining private-equity and other corporations’ increasing control over health care markets. The new deadline is now June 5, 2024.

At Lanton Law not only do we understand the issues, but we provide you with timely solutions to help you make informed decisions about either an acquisition target or ways to maximize value. We counsel clients by performing corporate due diligence, provide strategic advice for growth and business strategies as well as structuring and executing M&A transactions.

Contact us today to learn more

H.R. 3831: The AI Disclosure Act of 2023 Explained

H.R. 3831, the AI Disclosure Act of 2023, is a bill that would require companies that use artificial intelligence (AI) to disclose certain information about their use of AI. This information would include the purpose of the AI system, the data that the AI system is trained on, the algorithms that the AI system uses, and the potential risks and benefits of the AI system. The bill would also create a new agency within the Federal Trade Commission (FTC) to oversee the implementation of the law.

This bill is important because it would increase transparency and accountability in the use of AI. By requiring companies to disclose information about their use of AI, the bill would help consumers to understand how AI is being used and to make informed decisions about whether to use AI-powered products and services.

It is still too early to say whether H.R. 3831 will become law. However, the bill has generated a lot of interest and debate, and it is likely to continue to be a topic of discussion in the coming months.

If you are a stakeholder in the AI industry, you should be aware of H.R. 3831 and its potential implications for your business. Lanton Law’s technology section can help you to understand the bill and to help you develop a strategy to comply with looming regulatory oversight.

Contact Lanton Law today to learn more about how we can help you with your AI legal and policy needs.

Pharmacy Times Speaks with Lanton Law About "Vanity Drugs"

In an interview by Aislinn Antrim of Pharmacy Times called “Calling Them ‘Vanity Drugs,’ Some Insurers Refuse to Cover New Anti-Obesity Drugs,” Ron Lanton III, Esq., Partner at Lanton Law, discussed why insurers are refusing to cover new, highly effective anti-obesity drugs and how some prescribers are getting around the issue. Lanton said that this is a common issue across many different disease spaces and drug types, but some policy changes may be able to help.

The interview can be seen here.

We have taken the text that appears on Pharmacy Times.com from the interview and placed it below in case you have trouble accessing the video.

Aislinn Antrim: Hi, I'm Aislinn Antrim with Pharmacy Times, and I'm here with Ron Lanton, principal at Lanton Law, to discuss how and why some insurers are considering new weight loss and anti-diabetes drugs to be “vanity drugs.” So, there are several new drugs on the market, and they've shown significant weight loss in clinical trials. But some insurers are calling these “vanity drugs” and are not covering them. Do you have a sense of what this term, vanity drugs, means?

Ron Lanton III, Esq.: No, I don't. I think whenever somebody askd me, like, “What does that mean?” I’m always like, okay, let's go to the legal definition. And I don't think there really is a legal definition of vanity drugs, which is something that we say. But to me, whenever I hear something like that characterized as vanity drugs, it's just another excuse. We're not going to pay for it. Right? So, I got a couple of ideas about what I think is going on behind that terminology, but I just wanted to talk a little bit about what this drug is and kind of the history about why it got here and where we are.

So, the brand name drug is Wegovy, because it's just too complex for me to say the generic form of the name of it, but it was approved last year in June by the FDA. And apparently, this is a new generation of highly effective hormone-based obesity medications. And specifically, what it does is that it targets a hormone, GLP-1, which is secreted in the gut, and then targets receptors throughout the body. And it makes it so that there is some kind of positive response, where you do lose the weight. And for this drug, it was prescribed for patients that are obese, who have a BMI or body mass index of greater than 30, or a BMI greater than 27 accompanied by weight-related medical problems, such as high blood pressure and type 2 diabetes and cholesterol, things like that. It’s definitely something that I believe would be beneficial to the patient because if you do take it, if it works as it says, we're not going to jump to those other more expensive disease states that cost a lot of money to treat.

But, going back to like the whole vanity drug classification of it, yes, this isn't a proven curative drug, I think they were saying like up to 13% of individuals don't lose any weight that take this drug. But, you know, insurance companies have for a while used thing called step therapy, where they're like, try drug A first before you go to drug B, and a lot of time is wasted. And a lot of dollars can be wasted too, because that's that kind of one-size-fits-all approach to everything. Whereas, you know, if we're doing more curative, something that just kind of goes right to your specific biological makeup, that could have a lot better of an outcome for a patient and at a lower cost. So, I think they're coming at it from a step therapy mindset.

And, too, there is a policy that's been weakened a little bit ago by the court, but the copay accumulator, where they're stopping you from having the rebates from a manufacturer go to the deductible and the patient's maximum allowable cost. So, it's like you have those mindsets of let's try not to pay it. But I think, you know, with our medicine and science getting a lot better, we're going to have to think past that old traditional reimbursement system.

Aislinn Antrim: Yeah, absolutely. This seems to be kind of a widespread issue—you talked about Wegovy, and it's been applied to a couple of these other similar new drugs. What are pharmaceutical lobbyists really doing to kind of get insurers to pay for these?

Ron Lanton III, Esq: That's an interesting question. So, I can't speak for pharma, I don't know what they're doing. I talked to pharma interests, I did look at their website, and one of their policy issues is called “Build a better patient-centered agenda.” And I like where they're going with that, because essentially, what it's saying is we want insurance to work like insurance is supposed to work. Which is, if we have something that's wrong with us, we go see the doctor, the doctor prescribes. And the doctor says, “This is what we think is good for that patient to have a good outcome.” And the insurance is supposed to just pay for it. Now, you know, there's all kinds of things, and I know why there's rules about it and there's all kinds of special circumstances. But you know, more times than not, we're fighting the insurance company to pay for things that seem to be common sense. So, I think there is a bill, which I'll talk about in a little bit, on the obesity issue that we're talking about here. But instead of it being what I call a hard lobbying issue, which is I'm going to go directly to my congressman, or my senator and we'll go lobby about how we need this particular drug. It seems to be more of a soft lobbying issue to me, where the pharmaceutical industry would have to reach out to the payers to have that conversation about why the manufacturers think this is a good thing with the patients today. They have to talk to the patient themselves and educate the patient. So, if the patient feels comfortable enough, what you're dealing with is years of stigma and everything about this. Again, this is getting out of traditional health care and going to the root of the problem. And instead of just treating a symptom, you know, we're really trying to figure out what's going on here. So that's the other thing. And then really, the last thing that I see as kind of the soft lobbying by pharma is educating the doctors about this drug and why this is here, and why they should start to utilize this in their weapons system of fighting whatever it is that they're dealing with patients. So that's what I call more of a soft lobbying issue.

Aislinn Antrim: Interesting. Are there policy changes that could address this issue?

Ron Lanton III, Esq: The court system is weakening the copay accumulators, which I mentioned earlier, and there have been several state and state efforts. And, definitely, there's a federal bill right now on step therapy, where they're trying to get rid of that, because again, it's like, why are we doing all these things that may not work, and it's wasting time and it's causing a lot of money. And we could just get right to the heart of the problem, especially when the doctors are saying, you really shouldn't get in between my relationship with my patient, because I know the patient. And, you know, I'm the closest that's here. So, this is what I think.

There is an interesting bill that I want to bring up about policy changes that you had asked about. So, there is a bill, HR 1577, and there's also a senate version of this—SB 596 is a companion bill. So it’s basically the same bill that's in the house is also in the Senate, same language, and everything. It’s called the Treat and Reduce Obesity Act and let me tell you just really quick what this is. The bill would allow for coverage for therapy that is provided by a physician who's not a primary care physician, or other health care providers and approved counseling programs, if you have a referral from your PCP. Currently, the therapy is covered only if provided by a PCP. The bill would also allow coverage under Medicare's prescription drug benefit, so under Part D, for the treatment of obesity, or weight loss management for individuals who are overweight. So, this really targets what we're talking about right now. And if we actually have this bill go through, I think this conversation will be a lot easier, because we already have the regulatory scheme for it, instead of having to build it from scratch and just kind of convince people that this is a good thing for patients to take. Again, when we're coming at it from the traditional mindset of “Let's try not to pay for things and if we do, let's try the cheaper stuff first, before we get to something that might actually help,” I think that's just backwards.

Aislinn Antrim: Yeah, absolutely. Do you see similar issues in other drug classes or treatment areas?

Ron Lanton III, Esq: A long while ago—well, it's about 2013, so seems like a long while ago, with everything that's happened between then—[we had] Sovaldi with hepatitis C, you know, at $4,000. For the treatment, I think it was 12 course treatment, and people were like, “Oh, my God.” I know there's still an issue but, you know, if 9 out of 10 times a patient takes this, they get better, those are pretty decent odds. So why not try it for a little bit? So, that would be my kind of form of step therapy, which is let's just try, and if it's not working, then okay, we can get off of it. But this kind of seems to be what I call a best-in-breed prescription out there. So, like, if this is the best thing, let's take it and see what happens. And I think, again, with drugs that are curative and more expensive, because the upfront cost has to be there, because you're not going to have the repeat customer because they're getting cured. But at the same time, I think somebody has to do a cost analysis at the payer by saying, if we put patient on drug A and it costs this, but if we put them on drug B, it's going to cost all this other stuff and the patient's going to get sicker. It's just that's just not really what we should be doing. I do know that there's this balance of, you know, we have to have something that's affordable for patients to take. So it's $84,000. And I hate to bring up old wounds, but it's at $4,000, something that is reasonable or not. And I think that's, you know, something that the pharma and the insurance just still haven't quite worked out yet, especially since we keep seeing this thing about drug price from congress, and why is this stuff so high? But I think now there's a lot more scrutiny starting to come into the picture with the Federal Trade Commission, and how they're now saying, okay, well, high drug prices and what are these PBMs doing and let's find out a little bit more about this. So, that's something we should continue to watch. But those are the policies. You know, if we get bills like this, we have an FTC that is really scrutinizing both pharma and the PBM industry, I think we'll start to slowly but surely get to an answer that's tolerable for everybody.

Aislinn Antrim: Well, that's good to hear. Some companies have found kind of an interesting workaround by marketing these drugs as diabetes treatments, rather than weight loss drugs. And in some cases that seems to have worked. Does this seem like an effective solution? Or what are your thoughts on this?

Ron Lanton III, Esq: I think it obviously depends on what the doctor is seeing from the patient. I mean, if you're pre-diabetic, then you know, if you don't do anything, you're going to get over into type 2 diabetes, potentially. So, I can understand the rationale behind it. But I don't think it's really that different than off labeling. I mean, you know, if you have a drug and it's supposed to be used for cancer A but also works for cancer B, it’s not approved for cancer B, but, you know, there may be times as a patient where your condition doesn't have something that is FDA approved, but the doctor is looking at these studies and trying to see what can help you. Again, that's that patient-doctor relationship that you just have to trust. And that's what the patient is looking for. So, I think it's really no different than off labeling and if that really goes to the result that we're getting to, I'm all for it.

Aislinn Antrim: Absolutely. Why do list prices vary for the same drug with different indications? So, with diabetes versus for obesity?

Ron Lanton III, Esq: Yeah, that's the million-dollar question. Literally, if you live with these high-priced drugs, right? I don't know if I can give you an answer. I think the best people to ask this question to would be the pharmacy benefit managers, because the more and more they've gotten involved, the more and more prices have gone up. And that is because the manufacturer has to hire the higher price because they have to compensate for the rebate that they're giving to the pharmacy benefit manager. So why is that? And I think that, you know, like I was telling you earlier, the scrutiny with the Federal Trade Commission going in and just seeing exactly what PBMs are doing with these drug prices, and then, you know, either getting some federal standards around it, and what they can and can't do or be giving the PBM a federal regulator. They don't have one, you know, and it's just this piecemeal stuff that they're doing by state. I think those days are numbered, as far as just having a PDMP and unregulated entity. But I think the more layers that start to get peeled back, the more attention that's coming. Again, this stuff doesn't happen overnight. None of this happened overnight at all. I mean, PBMs really didn't grow until the ‘90s. So, we're talking from the ‘90s until now, there's been some changes, gradual changes, but there's been a shift. And I think we're starting to start to shift that backwards to where we can get an answer. We'll find out these things.

Aislinn Antrim: Wonderful. Is there anything else you wanted to add on this topic?

Ron Lanton III, Esq: No. I think this is definitely not the last thing that we're going to see. I just think it's, I hate to say it, I know it's a different disease state, but it's just Sovaldi in a different form. I mean, we have these drugs that are promising to do things, and if 13%—and I know that's one study, but I mean, if somebody tells me “Okay, 13% of people this may not do anything for them.” I'm at least willing to give it a shot, because it's better than what we have now. And it's definitely better than some of the step therapy protocols that patients are going to have to go through.

Aislinn Antrim: Definitely, thank you for talking to me about this.

Ron Lanton III, Esq: Definitely. Thank you for asking.

FTC Takes Aggressive Policy Stance Against Drug Manufacturers and Pharmacy Benefit Managers (PBMs)

The Federal Trade Commission (FTC) has come out aggressively against both pharmaceutical manufacturers and pharmacy benefit managers (PBMs). The agency has released its policy statement seen here, announcing that the agency “will ramp up enforcement against any illegal bribes and rebate schemes that block patients’ access to competing lower-cost drugs.”  

Here is what the FTC is specifically targeting in its policy statement: 

• Exclusionary rebates that foreclose competition from lower-cost medicines may constitute unreasonable agreements in restraint of trade under Section 1 of the Sherman Act; unlawful monopolization under Section 2 of the Sherman Act; or exclusive dealing under Section 3 of the Clayton Act.

• Inducing prescription drug middlemen to place higher-priced drugs on formularies instead of lower-cost alternatives in a manner that shifts costs to payers and patients may violate the prohibition against unfair methods of competition or unfair acts or practices under Section 5 of the FTC Act. 

• Paying or accepting rebates or fees in exchange for excluding lower cost drugs may constitute commercial bribery under Section 2(c) of the Robinson-Patman Act, which prohibits compensating an intermediary to act against the interests of the party it represents in the transaction.

This follows the recently revealed PBM study by the FTC will officially examine the impact of vertically integrated PBMs on the access and affordability of prescription drugs. As part of this inquiry, the FTC will send compulsory orders to CVS Caremark; Express Scripts, Inc.; OptumRx, Inc.; Humana Inc.; Prime Therapeutics LLC; and MedImpact Healthcare Systems, Inc. 

Lanton Law is a national boutique regulatory law and lobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

The Pharmacy Benefit Manager Transparency Act of 2022 Introduced in Congress

The Pharmacy Benefit Manager Transparency Act of 2022 was introduced by Senate Commerce Science, and Transportation Committee Chair Maria Cantwell and Senate Judiciary Committee Ranking Member Chuck Grassley. 

The bill which can be viewed here, seeks to prevent unfair and deceptive acts or practices and the dissemination of false information related to pharmacy benefit management services for prescription drugs, and for other purposes. 

According to the Senate Commerce Committee’s announcement the proposed bill seeks to specifically do the following: 

PROHIBITS UNFAIR OR DECEPTIVE PRICING PRACTICES

The legislation would make it illegal for PBMs to engage in “spread pricing” in which they charge health plans and payers more for a prescription drug than what they reimburse to the pharmacy, and then pocket the difference – the “spread” – as profit.

The bill would also prohibit PBMs from arbitrarily, unfairly, or deceptively clawing back payments made to pharmacies, or arbitrarily, unfairly, or deceptively increasing fees or lowering reimbursements to offset reimbursement changes in federally-funded health plans.

INCENTIVIZES FAIR AND TRANSPARENT PBM PRACTICES

The bill would encourage fair and transparent PBM practices that benefit local pharmacies and consumers by making clear that a PBM would not be in violation of the Act if it:

Passes along 100 percent of any rebate to the health plan or payer; and

Provide full and complete disclosure of:

• The cost, price, and reimbursement of prescription drugs to the health plans and pharmacies;

• All fees,markups, and discounts the PBM charges or imposes on health plans and pharmacies; or

• The aggregate remuneration fees it receives from drugmakers to health plans, payers, and any federal agency.

MANDATES TRANSPARENCY

The bill would require PBMs to file an annual report with the FTC, shining a brighter light on how they charge health plans and pharmacies for prescription drugs. Specifically, it would require PBMs to disclose:

• The aggregate amount of the difference between how much each health plan paid the PBM for prescription drugs, and how much the PBM paid each pharmacy on behalf of health plans for such drugs;

• The aggregate total amount of fees the PBM charged to pharmacies and the total amount of reimbursements the PBM clawed back from pharmacies;

• Why the cost, copay, coinsurance, or deductible for a consumer increased, or why the reimbursement rate to a pharmacy decreased for a prescription drug; and

• For PBMs that control or are affiliated with a pharmacy, a description of any differences between what they reimburse or charge affiliated and nonaffiliated pharmacies.

ENFORCEMENT

The bill would authorize the FTC and state attorneys general to enforce its mandates, including by seeking civil penalties from PBM companies for each violation, plus an additional penalty of up to $1 million.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Our pharmacy practice has been helping pharmacies nationwide with operational issues, mergers and acquisitions, regulatory inquiries, audits, licensure, employment issues and contracting. Our lobbying efforts help pharmacies nationwide achieve improved business climates through carefully crafted legislation.  

If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Lanton Law Micro Webinar on the Upcoming FTC Comment Period on PBMs

We have a micro webinar on the upcoming FTC comment period on pharmacy benefit managers. Click here to view the micro webinar.

Senator Wyden Requests FTC To Investigate Retail Pharmacy Market Consolidation

In a recent press release Senator Wyden (D-OR) has sent a letter to the Federal Trade Commission (FTC) to according to “investigate recent consolidations in Oregon’s retail pharmacy market to assess whether large national pharmacy chains and health plans have acted to make this market less competitive.”

“Wyden’s letter highlights ongoing industry dynamics that pose significant challenges to small, independent pharmacies. One particular practice known as direct and indirect remuneration, a form of retrospective fees imposed on pharmacies by pharmaceutical benefit managers (PBMs) has been cited as a particular challenge for these pharmacies to maintain healthy finances. According to a report by the Centers for Medicare and Medicaid Services (CMS), PBMs increased pharmacy DIR fees under Medicare Part D by 91,500 percent from 2010 to 2019.”

DIR fees have been something that the Senator has been monitoring. His press release states “In October, Wyden also urged the federal Centers for Medicare and Medicaid Services (CMS) to review pharmacy closures nationwide in the last five years with a focus on how fees imposed by Medicare Part D plans and middlemen known as pharmacy benefit managers are driving those closures.”

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Our pharmacy practice has been helping pharmacies nationwide with operational issues, mergers and acquisitions, regulatory inquiries, audits, licensure, employment issues and contracting. Our lobbying efforts help pharmacies nationwide achieve improved business climates through carefully crafted legislation.  

If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

The Platform Accountability and Transparency Act (PATA) Introduced to Ensure Social Media Platform Transparency

Senators Coons (D-DE), Kloubuchar (D-MN) and Portman (R-OH) have introduced a bi-partisan proposed bill that would require social media companies to provide vetted, independent researchers and the public with access to certain platform data.

According to the bill’s press release, PATA proposes the following:

• Under PATA, independent researchers would be able to submit proposals to the National Science Foundation, an independent agency designed to promote the progress of science by approving research and development proposals from researchers across the sciences. If the requests are approved, social media companies would be required to provide the necessary data subject to certain privacy protections.

  • Companies that failed to comply would be subject to enforcement from the Federal Trade Commission (FTC) and face the potential loss of immunity under Section 230 of the Communications Decency Act.  

• Additionally, the bill would give the FTC the authority to require that platforms proactively make certain information available to researchers or the public on an ongoing basis, such as a comprehensive ad library with information about user targeting and engagement.

• The proposal would also protect researchers from legal liability that may arise from automatically collecting platform information if they comply with various privacy safeguards.  

The bill can be viewed here. 

This bill is important to watch as part of an ongoing trend of increasing policy scrutiny on the tech sector.

Lanton Law is a national boutique regulatory law and lobbying firm that focuses on technology and healthcare/life science. Our technology practice monitors relevant policy and regulatory decision makers and we counsel clients on emerging trends within this rapidly developing field. 

If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Antitrust Legislation Targeting Merger Filing Fees Passes Senate

U.S. Senator Amy Klobuchar (D-MN), Chair of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, and Senator Chuck Grassley (R-IA) who along with Senator Durbin (D-IL) as cosponsors have announced Senate passage of the Merger Filing Fee Modernization Act. 

The bill which can be found here, proposes to “Promote antitrust enforcement and protect competition through adjusting premerger filing fees, and increasing antitrust enforcement resources.”  

With a more aggressive FTC and a renewed emphasis on antitrust policy, commerce stakeholders should definitely pay attention to recent proposals on how to modify antitrust laws for the 21st century. 

Lanton Law is a national boutique regulatory law and lobbying firm that focuses on technology and healthcare/life science. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Senator Markey (D-MA) and Representatives Castor (D-FL) and Trahan (D-MA) Urge FTC To Use Authority to Make Tech Companies More Accountable

According to Senator Markey’s press release Senator Markey and Representatives Castor and Trahan have sent a letter to the Federal Trade Commission, urging the agency to use its full authority—including its authority under Section 5 of the FTC Act—to ensure these companies comply with their new policies. The Age Appropriate Design Code (AADC) took effect in the U.K. this September and requires online services available to children and teens to meet 15 key children’s privacy standards, many of which are similar to legislative proposals to update Senator Markey’s 1998 law, the Children’s Online Privacy and Protection Act (COPPA), in the United States.

It is no secret that technology stakeholders should be mindful of additional regulatory and policy scrutiny. Lanton Law is a national boutique regulatory law and lobbying firm that focuses on technology and healthcare/life science. We continue to monitor the policy and legal developments around the FTC.

If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

FTC Report to Congress on Privacy and Security

The Federal Trade Commission (FTC) last month issued the FTC Report to Congress on Privacy and Security. 

What’s in the Report? 

According to the agency “This report responds to the Joint Explanatory Statement accompanying the Consolidated Appropriations Act, 2021, P.L. 116-260, directing the Federal Trade Commission (“Commission” or “FTC”) to “conduct a comprehensive internal assessment measuring the agency’s current efforts related to data privacy and security while separately identifying all resource-based needs of the FTC to improve in these areas. The agreement also urges the FTC to provide a report describing the assessment’s findings to the Committees [on Appropriations of the House and Senate] within 180 days of enactment of this Act.”

Additionally, “The report first provides an overview of the FTC’s authority related to privacy and security, highlighting certain recent efforts in those areas. Second, it discusses priorities for improving the effectiveness of our efforts to protect Americans’ privacy. Third, it identifies areas in which we could use additional resources to further ensure Americans’ privacy is protected. Finally, it discusses the need for Congressional action on the FTC’s authority.”

Lanton Law is a national boutique regulatory law and lobbying firm that focuses on healthcare/life science and technology. We continue to monitor the policy and legal developments around the FTC.

If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Lina Khan Sworn in as FTC Chair

The Federal Trade Commission (FTC) released a June 15th press release announcing Lina Khan as the Chair of the FTC, with her term expiring on September 25, 2024. Ms. Khan was confirmed by the U.S. Senate on June 15, 2021. 

Lanton Law has been monitoring the FTC for our technology and healthcare clients. This move may signal that the Biden Administration and Congress may take on a more aggressive role in antitrust policy. Technology stakeholders should take note. 

Lanton Law is a national boutique regulatory law and lobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today. 

Update on FTC Administrative Complaint Against Illumina

Lanton Law has been monitoring the developments around the FTC’s administrative complaint against Illumina on marketplace competition concerns. We have recently shared an industry blog about this issue.

As an update to this matter, the FTC has issued a press release that explained the agency’s Motion to Dismiss for Preliminary Relief in Illumina/GRAIL Case. According to the FTC, “In the wake of the European Commission’s announcement that it is investigating Illumina’s $7.1 billion proposed acquisition of DNA sequencing provider Illumina, the Federal Trade Commission has authorized staff to dismiss its federal court complaint for Preliminary Injunction and Temporary Restraining Order.”

Additionally, ““The FTC sought preliminary relief in federal court to prevent Illumina and GRAIL from merging while the case is being decided on the merits in administrative court. At the time, a district court order was necessary to prevent the parties from consummating their merger. The administrative trial is scheduled to begin on August 24, 2021. Now that the European Commission is investigating, Illumina and GRAIL cannot implement the transaction without obtaining clearance from the European Commission.”

Lanton Law is a national boutique regulatory law and lobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

U.S. Supreme Court Limits the FTC’s Ability to Obtain Restitution for Deceptive Practices

On April 22, 2021, Justice Breyer wrote the majority opinion for AMG CAPITAL MANAGEMENT, LLC, ET AL. v. FEDERAL TRADE COMMISSION, which was a shock to many consumer advocates where the Court ruled unanimously against the Federal Trade Commission (FTC). The ruling could make it less cost effective for the FTC to pursue companies that violate privacy rules.

According to the case, the Federal Trade Commission filed a complaint against Scott Tucker and his companies alleging deceptive payday lending practices in violation of §5(a) of the Federal Trade Commission Act. The District Court granted the Commission’s request pursuant to §13(b) of the Act for a permanent injunction to prevent Tucker from committing future violations of the Act, and relied on the same authority to direct Tucker to pay $1.27 billion in restitution and disgorgement. On appeal, the Ninth Circuit rejected Tucker’s argument that §13(b) does not authorize the award of equitable monetary relief. 

The Court held that “Section 13(b) does not authorize the Commission to seek, or a court to award, equitable monetary relief such as restitution or disgorgement.” Congress is set to address this issue soon as it looks to reaffirm the agency’s power to provide consumer relief. 

FTC Acting Chairwoman Rebecca Kelly Slaughter released a statement about the case where she stated: 

“In AMG Capital, the Supreme Court ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior,” Acting Chairwoman Rebecca Kelly Slaughter said. “With this ruling, the Court has deprived the FTC of the strongest tool we had to help consumers when they need it most. We urge Congress to act swiftly to restore and strengthen the powers of the agency so we can make wronged consumers whole.”

Over the past four decades, the Commission has relied on Section 13(b) of the Federal Trade Commission Act to secure billions of dollars in relief for consumers in a wide variety of cases, including telemarketing fraud, anticompetitive pharmaceutical practices, data security and privacy, scams that target seniors and veterans, and deceptive business practices, among many others. More recently, in the wake of the pandemic, the FTC has used Section 13(b) to take action against entities operating COVID-related scams. Section 13(b) enforcement cases have resulted in the return of billions of dollars to consumers targeted by a wide variety of illegal scams and anticompetitive practices, including $11.2 billion in refunds to consumers during just the past five years.

Lanton Law is a national boutique law and lobbying firm that focuses on highly regulated industries such as technology, fintech, healthcare and clean energy. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

FTC Files Administrative Complaint Against Illumina on Market Competition Concerns

This week the Federal Trade Commission filed an administrative complaint to “block Illumina’s $7.1 billion proposed acquisition of Grail—a maker of a non-invasive, early detection liquid biopsy test that can screen for multiple types of cancer in asymptomatic patients at very early stages using DNA sequencing. Illumina is the only provider of DNA sequencing that is a viable option for these multi-cancer early detection, or MCED, tests in the United States.

The complaint alleges the proposed acquisition will diminish innovation in the U.S. market for MCED tests. MCED tests could be used to detect up to 50 types of cancer, most of which are not screened for at all today, saving millions of lives around the world. Grail is one of several competitors racing to develop these liquid biopsy tests, which analyze a sample of a patient’s blood or other fluid through DNA sequencing.”

Furthermore the complaint addressed the effect on the marketplace. The FTC alleged “that even if a viable substitute to Illumina’s NGS platform entered the market, it would take years for MCED test developers to switch to a platform other than Illumina’s because they would have to reconfigure their tests to work with the new NGS platform, and in some situations, conduct new clinical trials.”

Lanton Law is a national boutique regulatory law and lobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Tech Companies to Testify At House Judiciary Antitrust Subcommittee on July 27th

The House Judiciary Antitrust Subcommittee has scheduled a July 27, 2020 hearing for the CEO’s of Amazon, Apple, Google and Facebook (Big Tech) to testify regarding the Committee’s ongoing investigation of digital marketplace competition. The hearing is titled “Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Facebook, Google and Apple.”  

The Committee’s press release has a joint statement from House Judiciary Committee Chairman Nadler (D-NY) and Antitrust Subcommittee Chairman Cicilline (D-RI) which states “Since last June, the Subcommittee has been investigating the dominance of a small number of digital platforms and the adequacy of existing antitrust laws and enforcement. Given the central role these corporations play in the lives of the American people, it is critical that their CEOs are forthcoming. As we have said from the start, their testimony is essential for us to complete this investigation.”

The Committee’s investigation launched its antitrust investigation last June. The Committee’s efforts are bipartisan and the Committee is attempting to address whether Congressional oversight is needed to pass tighter antitrust laws to ensure a more balanced marketplace. The Committee’s investigation will focus on documenting where competition is lacking in digital markets; exploring whether large companies are suppressing competition; and determining whether Congress and regulators need to do more to address Big Tech's dominance. If Congress decides that legislation is needed, it could lead to the first major policy revisions of U.S. antitrust law in decades.

Additional policy threats to technology companies remain besides Congress. In a mix of business and political reasons for determining whether a new class of start ups is being stifled by Big Tech, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) last year have announced joint efforts to investigate Big Tech. The FTC will have responsibility for investigating Amazon and Facebook while the DOJ will investigate Google and Facebook. It is looking as though some kind of regulatory action is coming by year end. Not to mention Big Tech has been receiving a lot of antitrust scrutiny from overseas. 

It is no secret that oversight over technology stakeholders is near. It’s best to look at your risks to determine whether you have the tools to protect your business and be nimble enough to navigate the changing policy currents. 

Lanton Law is a national boutique law and government affairs firm that focuses on technology and healthcare. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.   

Pending Antitrust Actions Could Change Biosimilar Dynamics

I have a new article that was published in the Centers for Biosimilars titled Pending Antitrust Actions Could Change Biosimilar Dynamics. If you have trouble accessing the link above we have provided the article text below:

There are 3 major antitrust actions on the biosimilar scene still pending. These have a long way to go before any court resolution, unless the parties involved settle before then. One is a class-action lawsuit attacking the use of patent thickets and pay-for-delay tactics. The other is a claim alleging anticompetitive contract practices to retain market share for an originator product. Related to the latter, an investigation by the Federal Trade Commission (FTC) remains in progress.

Humira (adalimumab) antitrust litigation (1:19-cv-01873)
United Food and Commercial Workers Local 1500 filed a class-action lawsuit against AbbVie, the holder of patents for its blockbuster drug Humira, claiming a monopoly had been created by AbbVie via its use of patent thickets and pay-for-delay tactics to block less-expensive biosimilars of adalimumab and raise prices for indirect purchasers. One of the main allegations is that AbbVie amassed more than 100 patents to prevent biosimilar versions of Humira from reaching market before 2023. Another main argument is that AbbVie colluded with biosimilar makers by using financial inducements to delay the launching of competitors in the United States while allowing them in Europe. AbbVie denies using these tactics to create a monopoly and contends that the lawsuit threatens to “upend the well-settled balancebetween the patent and antitrust laws.” This case is ongoing.

Pfizer versus Johnson & Johnson (J&J; 2:17-cv-04180) 
Pfizer, the maker of the biosimilar Inflectra (infliximab), has sued J&J for alleged anticompetitive sales practices in regard to the infliximab reference product (Remicade). J&J is accused of using exclusionary contracts to keep the biosimilar out of the market. These contracts allegedly “led to the near total foreclosure of Inflectra and other infliximab biosimilars.” Bundling Remicade with other drugs in these contracts for hospitals and infusion centers was also done in order to retain market control, Pfizer alleges. Rebate penalties for payers and providers are also alleged. This case is in the discovery phase and will be well into 2020.

Walgreens/Kroger versus Johnson & Johnson (2-18-cv-02357)
Walgreens and Kroger sued J&J in 2018 for antitrust regarding its contracts with wholesale distributers purchasing Remicade which inflated its price. The case was dismissed for lack of standing or insufficient connection to and harm from the action challenged. Walgreens and Kroger appealed to the Third Circuit stating that the lower court was wrong in dismissing the case because of anti-assignment provisions between the wholesaler and the plaintiffs. The Third Circuit overturned the lower court ruling stating that the case could go forward in spite of the clause because the claim arises out of federal anti-trust law and not the contract itself. This case will now go back to the lower courts and start over from scratch. More cases like this could arise as distribution contract anti-assignment clauses are common and may have prevented many from suing in the past.

FTC Civil Investigation 

The FTC issued a Civil Investigative Demand (CID) to J&J regarding its contracting practices for Remicade, meaning it is investigating J&J’s contracting practices with respect to the reference product. Although the CID was issued in June 2019, J&J has yet to comment on the investigation. Because the inquiry is in its early phase, it remains unclear whether the FTC will lodge an antitrust suit against J&J. They would need to determine if bundling deals and the rebate practices involved constitute antitrust practices. 

All of this litigation may take years to resolve. If the court judgements do not come down in favor of the product originators, the cases could significantly change how biologics are priced, by either eliminating rebates or forcing payers to place both biosimilar and originator products on formularies

What is the Potential Fallout from FTC’s Decision to Investigate Big Tech?

What is the Potential Fallout from FTC’s Decision to Investigate Big Tech?

The Federal Trade Commission (FTC) issued a press release announcing that the agency will examine prior acquisitions by large technology companies between the years of January 1, 2010-December 31, 2019. With a 5-0 vote, the Commission seeks to examine subsequent trends of large cap acquisition on smaller firms to determine whether competition was restricted or whether competitive concerns should have been raised. 

“The Federal Trade Commission issued Special Orders to five large technology firms, requiring them to provide information about prior acquisitions not reported to the antitrust agencies under the Hart-Scott-Rodino (HSR) Act. The orders require Alphabet Inc. (including Google), Amazon.com, Inc., Apple Inc., Facebook, Inc., and Microsoft Corp. to provide information and documents on the terms, scope, structure, and purpose of transactions that each company consummated between Jan. 1, 2010 and Dec. 31, 2019.

The Commission issued these orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose. The orders will help the FTC deepen its understanding of large technology firms’ acquisition activity, including how these firms report their transactions to the federal antitrust agencies, and whether large tech companies are making potentially anticompetitive acquisitions of nascent or potential competitors that fall below HSR filing thresholds and therefore do not need to be reported to the antitrust agencies.”

What specifically is the FTC looking for?

“The Special Orders require each recipient to identify acquisitions that were not reported to the FTC and the U.S. Department of Justice under the HSR Act, and to provide information similar to that requested on the HSR notification and report form. The orders also require companies to provide information and documents on their corporate acquisition strategies, voting and board appointment agreements, agreements to hire key personnel from other companies, and post-employment covenants not to compete. Last, the orders ask for information related to post-acquisition product development and pricing, including whether and how acquired assets were integrated and how acquired data has been treated.”

What are the options for the FTC under this action?

With this review being operated by the agency’s Office of Policy Planning under Section 6(b) of the FTC Act the review could trigger an enforcement action but that this inquiry would not be able to share information with the Department of Justice unless there is an enforcement action.

So what does this mean?

The FTC has significant power to scrutinize mergers and stop them. In this case, the FTC’s aim is to examine how big tech became big tech? The answer is simple, not only did they innovate to create go to products, but these large companies like Amazon, Facebook, Alphabet, Microsoft and Apple grew through acquisitions. Determining whether to incorporate competition or “kill” acquired companies has heavily contributed to their success. While the FTC does have power to make problems for these companies, the fact that the agency’s scrutiny could go on for years poses the question of whether the FTC has enough resources to make any meaningful differences. Additionally, will these same scrutinized big tech companies provide a marketplace solution themselves by divesting certain businesses before policymakers require them to do so. 

This may be different for tech companies that aren’t large cap tech. Knowing what the competitive playing field is along with how regulators are overseeing this market is crucial to your success. Contact Lanton Law to learn about your options to put together a solid strategy to reach your goals.

For more information contact

Ron Lanton III, Esq. 

Principal 

Lanton Law 

rlanton@lantonlaw.com

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