Friday, January 17, 2014

Andrx Pharma., Inc. v. Biovail Corp. case brief summary

Andrx Pharma., Inc. v. Biovail Corp. case brief summary

HMRI (the drug pioneer) and Andrx entered into an agreement where HMRI paid Andrx $40M a year in exchange for refraining to market its generic version of HMRI’s drug as a settlement of a patent infringement suit by HMRI against Andrx. Meanwhile, Andrx, as first to file an abbreviated new drug application (ANDA) received a 180-day exclusivity period under the Hatch-Waxman Act which did not run while Andrx refrained from marketing the generic. Biovail had filed an ANDA after Andrx and gotten a preliminary approval, but could not get full approval until Andrx did—30 months after the patent infringement was filed by statute. Biovail sued Andrx for an illegal agreement to restrain trade.

The Court ruled that Biovail was prepared and intended to enter the market and consequently could suffer an injury-in-fact despite being only a potential competitor.

In addition, although unilateral restraint in marketing the generic by Andrx would not have created an antitrust injury to Biovail, the agreement between Andrx and HMRI—paying Andrx $40M/year in exchange for exercising an otherwise legal right to restrain trade—created the very injury that the antitrust laws were designed to prevent.

Legal Considerations

  • A potential competitor may suffer injury-in-fact if it can demonstrate an intention to enter the market and preparedness to do so—adequate background and experience, sufficient financial capability, and taking of actual and substantial steps towards entry such as consummation of contracts and procurement of facilities and equipment.

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