DOJ / FTC Regulatory Update Regarding Pharmaceutical Companies | Arnall Golden Gregory LLP

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

The DOJ announced on October 1, 2021 that three generic drug companies have agreed to pay more than $ 447 million to resolve liability for false claims for the pricing of generic drugs. The three companies, Taro Pharmaceuticals USA, Sandoz Inc. and Apotex Corporation have resolved claims arising from a major generic pricing case that involved numerous generic companies and is still pending. The acts of the three companies took place between 2013 and 2015 and involved receiving compensation through pricing, supply and customer allocation arrangements with other pharmaceutical manufacturers. Some of the drugs involved include etodolac, nystatin-triamcinolone cream, benazepril HCTZ, clobetasol, and pravastatin. The Anti-Kickback Statute prohibits businesses from receiving or making payments in exchange for arranging the sale or purchase of items for which payment can be made by a federal health care program.1

Regarding the FTC, President Biden recently appointed Lina M. Khan President of the FTC. President Khan has indicated through public statements and actions that the FTC will be very aggressive in prosecuting antitrust cases involving pharmaceutical (and other) companies. For example, President Khan announced top enforcement priorities and indicated that priority targets include drug companies and drug benefit managers. President Khan also recently appointed Holly Vedova as Director of the Competition Bureau. Ms. Vedova has worked for the FTC since 1990 and also spent two years in private practice as in-house legal counsel for a large pharmaceutical company.

It is clear that both brand and generic manufacturers are faced with an aggressive regulatory environment.

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

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