Product Market Definition Critical in Pay-for-Delay Cases

Parties in pay-for-delay antitrust actions should pay close attention to how product markets are defined in these cases because market definitions can have a huge impact on litigation outcomes.

A recent ruling narrowing the relevant product market in a pay-for-delay case involving Boehringer Ingelheim Pharmaceuticals Inc.'s stroke prevention drug Aggrenox is a good illustration of this point.

On Aug. 8, Judge Stefan R. Underhill of the U.S. District Court for the District of Connecticut, defined the relevant market in the case as Aggrenox (dipyridamole/aspirin tablets) and its generic equivalents, but didn’t include other drugs in the broader market of antiplatelet treatments.

Underhill’s ruling “is a big win for the plaintiffs,” Herbert Hovenkamp, a professor of law at the University of Iowa in Iowa City, told me in an Aug. 10 telephone call.  That’s because the narrower market definition is likely to make it easier for the plaintiffs to establish an antitrust violation in the case, he said.

“Limiting the market to the pioneer drug and its generic equivalents means that the parties almost certainly have enough market power to establish an antitrust violation,” he said.

According to Hovenkamp, how markets are defined in pay-for-delay cases can be “a continuing hurdle” for defendants in cases where the reverse payment is large, unless there's some very, very close substitute and those are rare in pioneer drug cases.” Hovenkamp is the author of the go-to 22-volume treatise on antitrust law.

Pay-for-delay or reverse-payment settlements are patent litigation settlements that generally involve payments from branded drug companies to generic drug companies in exchange for delaying the generic from reaching the market.  Such settlements are frequently challenged by the Federal Trade Commission and prescription drug purchasers including consumers, health insurers and drugstores, who argue that they drive up prescription drug costs.


Text of the court's decision is at


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