The Brattle Group has extensive experience with the antitrust liability and damages issues that arise in health care-related markets. We have provided expert reports and testimony on a wide range of topics, including price-fixing, agreements not to compete, monopolization, price-fixing, illegal tying, and merger reviews.
Our clients include pharmaceutical companies, medical device companies, health insurers, hospitals, regulators, and governments. In support of these clients, we conduct rigorous empirical analyses relying on our familiarity with health care economics, industry data sets, regulation, and industry practices. Many of our experts have worked at the U.S. Department of Justice (DOJ) and the U.S. Federal Trade Commission (FTC).
A team of Brattle economists assisted branded drug manufacturer Warner Chilcott in a closely-watched antitrust case involving the prescription acne medication Doryx. In this case, Warner Chilcott was alleged to have engaged in product hopping. Plaintiffs claimed that by making minor innovations in Doryx and subsequently discontinuing older versions of the drug, Warner Chilcott had prevented competition from generic drug manufacturers through “automatic substitution” in pharmacies. Working closely with attorneys from White & Case LLP, the Brattle team provided analytical support for four expert witnesses. Our reports and analyses showed that: (i) generic manufacturers compete with branded drugs using a variety of mechanisms rather than merely relying on “automatic substitution” of branded drugs with their generic equivalents; (ii) third party payors can and do drive utilization from a given branded drug towards a wide array of cheaper therapeutic substitutes; (iii) third party payors had driven utilization from Doryx to a number of therapeutic substitutes even when no generic equivalent for Doryx was available on the market; (iv) there were numerous pro-competitive business considerations motivating Warner Chilcott’s innovations in Doryx, including the need to reduce risks to patients taking the drug; and (v) changing the formulation of Doryx led to a significant reduction in reported adverse events. A ruling on summary judgment was found in favor of Warner Chilcott, the first decision in a product hopping case based on a full discovery record.
A class of direct purchasers and a class of indirect purchasers brought suit against the manufacturer and the marketer of a well-known, branded antidepressant. The plaintiffs alleged that the defendants brought sham patent infringement cases against generic manufacturers seeking to launch generic equivalents in an effort to protect their monopoly on the drug. Brattle consultants analyzed the relevant product market for the drug in question, calculated market shares, and evaluated rivals’ ability to expand output along with barriers to new entry.
Members of The Brattle Group worked for a major manufacturer of medical imaging equipment in order to obtain approval by the DOJ for its acquisition of a competitor’s business. Our work included developing product market definition among the different imaging product lines, assessing the effects of import competition during periods of favorable exchange rates, transfer pricing issues, and examination of scale economies in servicing equipment and in research and development.
In its 2013 decision in FTC v. Actavis, the Supreme Court ruled that settlements involving a so-called reverse payment should be subject to antitrust scrutiny using a rule-of-reason analysis. Brattle economists provided analyses of the economic implications of provisions commonly found in such settlements, including: (i) “no AG clauses,” under which the branded firm, as part of a patent settlement, agrees that it will not launch its own generic alternative when the first generic begins to compete and (ii) “acceleration clauses,” which allow entry by a settling generic firm if any other generic is launched before the settling generic’s agreed-upon entry date. In addition, we have evaluated the implications of courts endorsing a truncated analytical approach in evaluating such settlements.
Brattle principals have authored several amicus briefs explaining key economic considerations involved in evaluating antitrust implications of patent infringement settlements between brand and generic pharmaceutical drug manufacturers. In its 2013 decision in FTC v. Actavis, the Supreme Court ruled that settlements involving a so-called reverse payment should be subject to antitrust scrutiny using a rule-of-reason analysis. Brattle economists have commented on the economic implications of provisions commonly found in such settlements, including provisions often referred to as acceleration clauses authorized generic clauses, and ancillary services that a generic manufacturer might agree to provide. In addition, we have evaluated the implications of courts endorsing a truncated analytical approach in evaluating such settlements.
Brattle experts have testified in several cases in which drug companies allegedly inflated the list price of their drugs (known as average wholesale price or “AWP”) because ultimate payors, including private insurers and Medicare, reimburse pharmacies based on the AWP list price. According to these claims, manufacturers sold their drugs to pharmacies at a significantly lower price, “marketing the spread” between AWP and this lower price to incentivize pharmacies to buy their products. Our analyses demonstrated that many payors did not base their reimbursements to pharmacies on their expectations of pharmacy spreads. Instead, we showed that in many cases, large knowledgeable payors knew of and tolerated large spreads because they were required to attract providers to their insurance networks. Consistent with this, we found that many payors did not change their reimbursement rates even when they became aware of the spreads that pharmacies obtained as a result of allegedly inflated AWPs.
Complex business and legal matters require intellectually honest and analytically rigorous solutions that are thoughtfully developed and clearly communicated. We apply economic and finance principles with uncompromising quality to achieve clarity in the face of complexity. Independent analysis, responsive execution, and compelling presentation. That’s Brattle. That’s the Power of Economics.