The Federal Trade Commission is urging a federal appeals court to preserve antitrust scrutiny of Amgen Inc.’s acquisition of patent rights connected to Enbrel, arguing that private intellectual-property transactions do not become immune from competition law simply because they later lead to patent applications or litigation.
The dispute centers on Enbrel, also known as etanercept, a biologic medicine used to treat rheumatoid arthritis and other inflammatory conditions. Although the case concerns one medicine, its outcome could influence how courts evaluate pharmaceutical patent transactions that allegedly delay competition from lower-cost biosimilars.
CareFirst of Maryland and affiliated entities sued Amgen under Section 2 of the Sherman Act. They allege that the drugmaker obtained exclusive rights to pending patent applications from Roche, shaped the resulting claims to cover Enbrel and used those rights to prevent competing products from entering the market.
According to the FTC, the transaction allegedly helped extend Amgen’s exclusivity over Enbrel by approximately 15 years. CareFirst maintains that without the acquisition and subsequent patent enforcement, at least one biosimilar competitor could have entered the market earlier and reduced prices.
These claims remain allegations, and the litigation has not produced a final determination that Amgen violated antitrust law.
Amgen argues the transaction is protected
Amgen has argued that acquiring patent applications cannot constitute anticompetitive conduct under Section 2. The company also invokes the Noerr-Pennington doctrine, which generally protects efforts to petition the government—including certain court proceedings and communications with administrative agencies—from antitrust liability.
Under Amgen’s theory, its acquisition should be protected because it later prosecuted the applications before the U.S. Patent and Trademark Office and enforced the resulting patents through litigation.
A federal district court in Virginia declined to dismiss CareFirst’s case, allowing the antitrust claims to proceed. Amgen then appealed that decision to the U.S. Court of Appeals for the Fourth Circuit.
FTC separates the acquisition from later petitioning
In an amicus brief, the FTC asks the Fourth Circuit to reject any categorical exemption for acquisitions involving pending patent applications.
The agency draws a line between a private commercial transaction and the government-directed activity that may follow it. Applying for a patent or filing a lawsuit may qualify as protected petitioning, the commission argues, but negotiating and acquiring intellectual-property rights from another private party is a separate commercial act.
Consequently, the FTC says the Noerr-Pennington doctrine should not automatically shield the underlying acquisition from review.
The commission also rejects the idea that pending patent applications deserve broader protection than issued patents. Both types of assets can affect competition, it argues, because control over them may enable a company with substantial market power to exclude rivals.
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A pending application may present distinct concerns because its claims can sometimes be amended during the examination process. In the FTC’s view, that flexibility could allow an acquirer to pursue claims designed to cover its existing product or obstruct emerging competitors.
The agency is not asking the appeals court to declare Amgen liable. Rather, it argues that courts must be permitted to examine the transaction under established antitrust standards instead of treating it as automatically lawful.
Broader consequences for biologic competition
The case arrives amid continuing concern about the cost of biologic medicines and the difficulty biosimilar manufacturers face when trying to enter the U.S. market.
Biosimilars serve a function similar to generic versions of conventional drugs, although biologics are more complex and cannot be duplicated in precisely the same way. Their introduction can nevertheless create price competition and expand treatment options.
Patent protections remain essential to rewarding pharmaceutical research. At the same time, antitrust law limits business practices that maintain monopoly power through means other than legitimate competition.
The Fourth Circuit must therefore consider where lawful patent activity ends and potentially exclusionary commercial conduct begins. A broad ruling in Amgen’s favor could make it more difficult to challenge private acquisitions of pending patent rights, even when plaintiffs allege that those transactions were designed to block competitors.
A ruling allowing the case to continue would not establish that every patent acquisition is anticompetitive. It would instead preserve the possibility of reviewing such transactions based on their purpose, structure and effects on the market.
For patients, insurers and other health-care purchasers, the practical concern is whether patent-related agreements can delay less-expensive alternatives and sustain higher drug costs. For pharmaceutical companies, the decision could clarify how patent strategy and antitrust obligations interact long before a patent is issued or enforced.
The case is CareFirst of Maryland Inc. et al. v. Amgen Inc. et al., pending in the U.S. Court of Appeals for the Fourth Circuit.
Source: Bloomberg
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