Anti-Trust

1. Colonel Gutermuth - Health Economics Anti-Trust … “the unrestrained interaction of competitive forces will yield the best allocation of economic resources, the lowest prices, the highest quality and the greatest material progress” ... (Supreme Court Justice Black)

2. The Laws • Sherman Act (1890) • Clayton Act (1914) • Federal Trade Commission Act (1914) • Federal Food, Drug, and Cosmetic Act (1938) • Hatch-Waxman Amendments (1984) Colonel Gutermuth - Health Economics

3. Sherman Act • Section 1 prohibits explicit cartels • “… every contract, …, or conspiracy in restraint of trade or commerce … is declared to be illegal.” • Section 2 deals with monopolization • “… every person who shall monopolize or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several states, …, shall be deemed guilty of a felony …” Colonel Gutermuth - Health Economics

4. Clayton Act • Section 2 • Prohibits price discrimination that decreases competition • Section 3 • Prohibits tie-in sales that decrease competition • Section 7 • Prohibits mergers that decrease competition • Section 4 allows for “Treble Damages” • “Doctrine of Incipiency” Colonel Gutermuth - Health Economics

5. FTC Act • Designed to • enforce laws • adjudicate disputes • Section 5 • “That unfair methods of competition in commerce are hereby declared to be illegal.” • Section 5 revised in 1938 • “Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are hereby declared unlawful.” • Consumer Protection Colonel Gutermuth - Health Economics

6. FFDCA • Gives authority to the FDA to oversee the safety of food, drugs, and cosmetics. • All violations of the FD&C Act require interstate commerce. • Uses strict liability. Colonel Gutermuth - Health Economics

7. Hatch-Waxman • To facilitate approval of generic drugs • But…… • 30-month stay • Exclusivity Period Manipulation by Brand-Name Monopolies!!!!! Colonel Gutermuth - Health Economics

8. Enforcement of the Laws • U.S. Department of Justice • Suit is tried in federal court. • Could lead to fines and/or jail. • Sole jurisdiction of enforcement of the Sherman Act. • Both civil and criminal statute. • “Per se” offenses  criminal! Colonel Gutermuth - Health Economics

9. Enforcement of the Laws, cont. • Federal Trade Commission • Case decided by a judge (and reviewed by Fed. Trade commissioners). • Could lead to cease and desist order. • Enforcement of FTC and Clayton Acts. • Consumer protection with respect to misrepresentation and deceptive advertising. Colonel Gutermuth - Health Economics

10. Who Can Sue? • Must have Legal Standing • Someone who suffers injury that the law is designed to protect. • Individual Consumers • “Class Action Suits” • Private Litigation Colonel Gutermuth - Health Economics

11. Per Se Violations • … established by legal precedents • Collusive Price-Fixing • Market Sharing • Group Boycott of Distributors Colonel Gutermuth - Health Economics

12. Cases • LORAZEPAM LITIGATION • PRILOSEC LITIGATION • CIPRO LITIGATION Colonel Gutermuth - Health Economics