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Senators Question FTC’s Pay-for-Delay Crusade

By Aruna Viswanatha | June 9, 2022 6:41 pm

A top Republican on the Senate Judiciary antitrust subcommittee questioned on Wednesday the Federal Trade Commission’s campaign to stop brand-name drug manufacturers from paying their generic competitors to stay off the market.

At an oversight hearing Wednesday afternoon, Orrin Hatch (R-Utah) worried that fighting such agreements, which the FTC has dubbed pay-for-delay, “could effectively discourage pro-consumer settlements.”

The hesitation was bi-partisan. “Isn’t it sufficient to have the settlements subject to court approval without the FTC intervening?” asked Arlen Specter (D-Penn.).

A ban on the settlements was included in President Obama’s health care overhaul plan but didn’t make it into the final health care reform package.

FTC chairman Jon Leibowitz and Assistant Attorney General Christine Varney were on Capitol Hill today to testify about their agencies’ antitrust enforcement efforts under their management.

Herb Kohl (D-Wis.), who heads the antitrust subcommittee, took a shot at the previous enforcers in his remarks opening the hearing. “Antitrust enforcement was sorely in need of revival at the beginning of the new administration,” Kohl said.

But not all lawmakers were as friendly. Hatch worried not just about the FTC’s campaign against the drug patent settlements, but also about the FTC’s attempts to use its authority provided under Section 5 of the FTC Act, which has not been tested by the courts in recent years.

“I’m concerned about this development,” Hatch said in his opening remarks.

Section 5 has a “much thinner jurisprudential record, and can also lead to abuse if there are no clear, specific standards,” Hatch said.

Leibowitz defended the agency’s use of the law. “The only purpose of Section 5 was to make something punishable that is not punishable under traditional antitrust law,” he said.

Al Franken (D-Minn.), a vocal critic of Comcast’s plan to take a majority stake in NBC, used his time to press Varney on the deal, which is currently being reviewed by the DOJ. “NBC can start charging Comcast twice as much for its programming, and that means every other cable station has to pay the same fee,” Franken said.

But Specter jumped in to defend Comcast, which has its headquarters in his home state of Pennsylvania, and asked Varney not to “hypothesize dastardly conduct” in the review.

The Justice Department’s agriculture workshops, co-hosted with the Department of Agriculture, also were a popular topic at the hearing. Varney, Attorney General Eric Holder and Agriculture Secretary Tom Vilsack are scheduled to appear at the next session in Wisconsin later this month.

Other hearing highlights: Varney defended her division’s decision to let the deal between ticket giant Ticketmaster and concert promoter Live Nation close; Richard Durbin (D-Ill.) raised concerns about activity in the credit card industry; and Hatch used the forum to raise his concerns with the way college football orchestrates its post-season bowl games.

“Do you believe college sports are too trivial for the Justice Department?” Hatch asked Varney.

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  1. [...] FTC’s strident campaign against patent litigation settlements questioned (Main Justice) [...]

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