FTC Clarification Of Law On Citizen Petitions Could Bring Antitrust Scrutiny

The Federal Trade Commission wants to clarify through case law that repeated petitioning of the government could bring antitrust enforcement, even if petitioners make scientific and regulatory arguments.

Repetitive petitioning "that employs government processes, rather than the outcome of those processes, to harm a competitor - even in instances where certain filings within the pattern do not meet" the strict definition of "objectively baseless" - should not enjoy Constitutional protections, an FTC report states.

The recommendation comes from a staff report, "Enforcement Perspectives on the Noerr-Pennington Doctrine," which describes several areas where FTC would prefer to clarify parameters determining what actions are protected from antitrust scrutiny when petitioning the government.

FTC's interest in the subject could have implications for ANDA approvals. Generic drug companies say brand firms often file citizen petitions at the last minute to delay approval of generics.

While citizen petitions commonly make scientific and regulatory arguments, FTC appears to be outlining principles on challenging petitions regardless of the merits of their contents.

Enforcement against a pattern of filings "that has directly harmed a competitor through the cost and delay associated with responding to such filings would not conflict with the values that Noerr was intended to protect while furthering consumers' interest in marketplace competition," FTC says.

FTC suggests using the criteria of whether repetitive petitions filed "only for the purpose of hindering marketplace rivals are valuable to the governmental process or are an abuse of process."

Attorney Tim Gilbert said in an interview, "FTC is often reticent to get involved with petitions to the FDA that call on the agency to make discretionary judgments," but the discussion of the repetitive petitioning could be signaling an interest in enforcement.

"It's a shot across the bow, subtly," Gilbert said.

FTC also is looking at whether introducing certain follow-on brand drugs as the original products near patent expiration could raise anticompetitive concerns. In addition, drug firms describe as anticompetitive some patent litigation initiated by competing firms (¹ (Also see "Follow-On Brand Drugs Could Draw FTC Anticompetitive Scrutiny" - Pink Sheet, 27 Jun, 2005.), p. 13 and ² (Also see "Adams’ Suit Could Delay ANDA For URL/Mutual’s Mucinex Generic" - Pink Sheet, 9 Oct, 2006.), p. 9).

Approval delays resulting from citizen petitions have prompted efforts to resolve the issue. The generics industry has advanced proposals that would "decouple" FDA's review of citizen petitions from its review of generic applications, and the agency itself has said it will refer petitions it finds anti-competitive to FTC.

FTC additionally wants to clarify that filings seeking only ministerial government acts are not protected by Noerr. The commission has established patent listings in the "Orange Book" are not protected activities.

In 2002, a suit supported by FTC helped Buspar generics through a ruling that tossed out Bristol's patent for a metabolite of buspirone.

The commission is also looking to definitively establish misrepresentations are not protected as part of the petitioning process.

"For example, to the extent that misrepresentations in the FDA drug-approval context are deemed actual petitioning potentially protected by Noerr (rather than ministerial filings not subject to Noerr), courts should consider whether...relevant case law would disqualify such misrepresentations from Noerr protection," FTC states.

FTC Office of Policy Planning Director Maureen Ohlhausen explained that the commission produced the report to frame enforcement steps it plans to take. A similar report on the state action doctrine released in 2003 has been a road map for activity in that area.

The Noerr report states "the Commission should take appropriate opportunities - either in cases brought by the Commission itself or by means of amicus filings in other cases - to further delineate the proper application of the Noerr doctrine."

The report does not call for legislative action, Ohlhausen said, because the Supreme Court has established petitioning as an action protected by the First Amendment, and legislative codification under such circumstances would be extremely difficult.

[Editor's note: This story was contributed by " ³ The Pink Sheet ," your source for prescription drug news. For more information call 1-800-332-2181.]