The Federal Trade Commission and the Justice department are having a little spat. It all began when the FTC ruled that a legal settlement between Schering-Plough and two manufacturers of generic drugs violated antitrust law. Under the settlement, the two generic companies agreed to delay marketing generic versions of Schering’s K-Dur20 potassium supplement. In exchange, the generic companies received cash from Schering. The FTC says that Schering bought off its potential competitors, and that the result will be higher drug prices for consumers.
The Justice Department doesn’t deny that, exactly. Rather, it says that the peculiarities of patent law make it impossible in this instance to overturn the settlement. It may smell a little fishy, the Justice Department is saying, but there isn’t anything we can do about it except hope that a more clear-cut case of abuse presents itself, allowing the government to draw a bright line between legal and illegal cooperation between brand-name and generic pharmaceutical companies.
It’s fairly unusual for two government agencies, both purporting to represent the United States, to take opposite sides in a formal judicial proceeding. According to tradition, the Justice Department (through the office of Solicitor General) is “the United States.” But what does that make the FTC? Lichtenstein? Should the Supreme Court take this case, it will have to decide, among other things, which one of these government bodies speaks for the good old US of A.
To read the footnotes below and on the next five pages, move your mouse over the portions highlighted in yellow. If you would like to read the FTC’s cert petition, click here. If you would like to read the Solicitor General’s response, click here.
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