Accessing Brand-Generic Settlement Data

FTC v. Cephalon (E.D. Pa. 2010)

Peter Loftus at the Wall Street Journal has written a short article titled “Drug Firms Want Patent Documents Kept Secret.”  At issue is a large cache of brand-generic settlement data held by the FTC and DOJ. 

In 2008, the FTC sued Cephalon alleging antitrust violations based on a set of reverse-payment settlements to generic manufacturers companies. The settlements meant that Cephalon could retain market exclusivity for its major drug Provigil until 2012.

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The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) requires pharmaceutical companies to submit (to the FTC and DOJ) most major pharmaceutical patent settlements; brand-generic marketing or licensing agreements; and generic-generic agreements regarding the 180 day exclusivity.  Up to now (and according to law), the US government has kept those settlements secret except for (1) times when it challenges a settlement as anticompetitive and (2) aggregate settlement data released in FTC reports.

In its lawsuit, Cephalon has asked the District Court to compel disclosure of the underlying settlement information. According to the defendant, the FTC has repeatedly cited its own analysis of the settlement data, and Cephalon is requesting the source materials “in order to be in a position to respond to any use of the studies in motion practice and to be able to cross-examine experts or other witnesses relying upon them.”  In response, the FTC argued that its studies should be available to the court even if it does not reveal the underlying data because “reliance on extra-record empirical studies for … facts that have relevance to legal reasoning, is a well-established practice in federal courts.”  Of course, the problem here is that the FTC is both the plaintiff and the creator of the empirical study.  In addition to the FTC, a group of 35+ pharmaceutical companies also filed a brief — arguing that the disclosure would be highly prejudicial to their interests in keeping the information secret.   (The pharma brief may have been quite expensive to draft — it was signed by lawyers from 21 different major law firms).

The MMA includes some secrecy language preventing the government from disclosing the submissions “except as may be relevant to any administrative or judicial action or proceeding.”

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

8 thoughts on “Accessing Brand-Generic Settlement Data

  1. The reverse-payment issue is heating up, and indeed may even shape up to be one of the hot topics in patent litigation for the next year or so. Of course, one of these cases has got to go up to the SCOTUS before too much longer. Interesting twist in this particular case, with the brand being the party that’s petitioning for disclosure of the settlement terms.

  2. Paulie,

    I be curious to see if your streak runs all the way through to the antitrust side. Ya got any cites for me to check out in my leisure time?

  3. Wikileaks to the rescue. But if the WL volunteers think getting harassed at the border is bad, they ain’t seen nothin’ yet. (I’m still waiting for the BofA dump.)

  4. link to finance.yahoo.com

    I lulzed. Apparently China isn’t set to completely take over the world, manufacturing wise or otherwise, anytime soon. I guess soon they’ll be outsourcing to us lol.

    Oh, but, Intellectual Property!!!!!!!11111eleventyone!!!

  5. Arguing for “reliance on empirical studies for … facts that have relevance to legal reasoning”, where the creator of the empirical study is the plaintiff itself, but refusing any discovery on supporting data for those facts, does take legal chutzpah few normal parties would risk before a normal judge.
    [But not more so than citations of its own uncontested, un-litigated, consent judgments as case law legal authority by the Justice Department in some other patent-antitrust matters such as patent pools.]

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