FTC wades into Mylan ‘product hopping’ row

The US Federal Trade Commission (FTC) has intervened in a ‘product hopping’ dispute concerning an acne treatment drug.

In an amicus brief filed on Wednesday, September 30 at the US Court of Appeals for the Federal Circuit, the FTC said that allowing product hopping can violate anti-competition laws.

Product hopping occurs when small reformulations that offer little or no therapeutic advantages are made to a patented drug to obstruct competitors.

The dispute in question centres on the acne drug Doryx (doxycycline hyclate), produced by Warner Chilcott, which was acquired by Actavis in 2013. Actavis is now called Allergan.

Mylan, which produces a generic version of the drug, sued Warner Chilcott at the US District Court for the Eastern District of Pennsylvania claiming that the company had acted anti-competitively by product hopping.

According to Mylan, Warner Chilcott had prevented it from competing in pharmacies by making minor innovations and subsequently discontinuing older versions of the drug.

But Warner Chilcott filed a motion for summary judgment, which was accepted.

The district court, in accepting the motion, said Warner Chilcott had not acted anti-competitively because Mylan had failed to demonstrate that changes to the formulations were predatory in nature and the product already faced competition from other drug makers.

Mylan then appealed against the ruling to the US Court of Appeals for the Third Circuit.

According to the FTC’s brief, the district court’s broad ruling “effectively embraces a rule of nearly per se legality for product-hopping conduct”.

“The district court held that a brand company may with impunity destroy what is often the only means of generic distribution—automatic substitution—so long as generics remain hypothetically free to pursue new and more costly distribution alternatives, such as direct advertising to physicians.

“That outcome conflicts with the law of the third circuit, as well as other circuits,” the brief said.