FTC Challenges Court’s Approach to Johnson & Johnson Patent Acquisition in Antitrust Case

According to GeneOnline, the FTC filed an amicus brief with the U.S. Court of Appeals for the Fourth Circuit in litigation concerning Johnson & Johnson’s acquisition of patents related to ustekinumab, the active ingredient in Stelara. The agency contends that the district court applied an excessively narrow interpretation of monopolization law under Section 2 of the Sherman Act, making it more difficult for plaintiffs and regulators to challenge anticompetitive conduct.

The case stems from allegations that Johnson & Johnson used patent acquisitions and related strategies to maintain its dominance in the market for ustekinumab-based treatments. While the dispute involves intellectual property rights, the FTC argues that patent ownership does not automatically shield a company from antitrust scrutiny when the acquisition or exercise of those rights may harm competition.

GeneOnline reported that the agency warned the lower court’s reasoning could have consequences extending beyond the immediate case. The FTC told the appeals court that antitrust law has long recognized that otherwise lawful business conduct, including the acquisition of intellectual property, can violate competition laws when used to unlawfully maintain monopoly power.

The filing reflects growing regulatory attention to the relationship between patents and competition in the pharmaceutical industry. Antitrust authorities have increasingly examined whether certain patent-related transactions, licensing arrangements, or exclusivity strategies can delay the arrival of lower-cost competitors, including biosimilars.

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Stelara, which is approved to treat conditions including psoriasis, psoriatic arthritis, Crohn’s disease and ulcerative colitis, has generated billions of dollars in annual sales for Johnson & Johnson and has been one of the company’s most commercially important products. As key exclusivity protections near expiration, competition from biosimilar manufacturers has become an increasingly significant issue for both regulators and industry participants.

The FTC’s position is consistent with a broader push by competition authorities to scrutinize conduct that may impede generic or biosimilar entry. Regulators have argued that robust competition in pharmaceutical markets can reduce healthcare costs and improve patient access to treatments, while drug manufacturers maintain that patent protections are critical for supporting innovation and recouping research and development investments.

U.S. courts have previously recognized that patent-related conduct may be subject to antitrust review. In the landmark Supreme Court case FTC v. Actavis, the Court held that certain agreements involving pharmaceutical patent disputes could face antitrust scrutiny when they have the potential to delay competition. The FTC’s latest filing similarly argues that the existence of patent rights should not preclude courts from examining whether competition has been unlawfully restricted.

Johnson & Johnson has defended its conduct in the litigation, while the FTC maintains that the appellate court should adopt a broader framework for evaluating monopolization claims involving patent acquisitions. The Fourth Circuit has not yet ruled on the issues raised in the agency’s brief.

Source: GeneOnline