The Case for Resurrecting the FTC Act’s Penalty Offense Authority

Chopra, Rohit; Levine, Samuel A.A.

doi:10.2139/ssrn.3721256

Cited by 1 publication

(5 citation statements)

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“… a Information based on A Brief Overview of the Federal Trade Commission’s Investigative, Law Enforcement, and Rulemaking Authority, the article by Chopra and Levine, and Kanwit SW, Federal Trade Commission (2022-2023 edition) (accessed via Westlaw). b Rulemaking for “unfair or deceptive acts or practices” is subject to additional procedures under the Magnuson-Moss Act.…”

Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

“…Although FTC has never issued such a rule, legal scholars, including former FTC Commissioner Rohit Chopra and current FTC Chair Lina Khan, have argued it could . FTC could also take greater advantage of its authority to issue monetary penalties for conduct that is unlawful for manufacturers under a prior FTC order . Both of these tools allow FTC to predefine categories of conduct—such as false regulatory filings to delay generic approval—as unlawful, thus deterring them under threat of monetary penalties.…”

Section: Methodsmentioning

confidence: 99%

“…We also collected the type and quantity of resulting monetary payments, including equitable relief, which forces a company to disgorge earnings or compensate consumers, and civil penalties, which punish the company for misconduct (Box). 19,21 For actions involving mergers, we collected the date the complaint was filed and information on the outcome, including whether it resulted in a settlement or dismissal, and the type and quantity of drugs required to be divested as a condition of the merger. We used complaints, press releases, consent orders, FTC analyses, and other documents available on the FTC website to determine whether each divested drug was branded or generic and whether it was FDA approved or in development at the time of the divestiture.…”

Section: Data Extractionmentioning

confidence: 99%

“…21 FTC could also take greater advantage of its authority to issue monetary penalties for conduct that is unlawful for manufacturers under a prior FTC order. 19 Both of these tools allow FTC to predefine categories of conduct-such as false regulatory filings to delay generic approval-as unlawful, thus deterring them under threat of monetary penalties. This approach may prove more effective than seeking compensation after the misconduct occurs.…”

Section: Box Federal Trade Commission (Ftc) Pharmaceutical Enforcemen...mentioning

confidence: 99%

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Federal Trade Commission Actions on Prescription Drugs, 2000-2022

Daval,

Egilman,

Sarpatwari

et al. 2024

JAMA

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ImportanceThe Federal Trade Commission’s (FTC) oversight role in the pharmaceutical market is critical to the health of patients and the health care system. This study characterized the FTC’s policy on the pharmaceutical market in recent decades, identifying the types of actions it has favored, barriers it has faced, and authorities that remain untested.ObjectiveTo review FTC legal actions in the pharmaceutical market from 2000-2022.Evidence ReviewLegal actions were determined through manual review of search results from the FTC’s online Legal Library as well as a 2023 FTC report on pharmaceutical actions. The alleged misconduct, type of legal action taken, timing, and outcome were collected from press releases, complaints, orders, and other legal documents.FindingsFrom 2000-2022, the FTC challenged 62 mergers, brought 22 enforcement actions against allegedly unlawful business practices, and made 1 rule related to pharmaceuticals. Alleged misconduct in enforcement actions involved anticompetitive settlements in patent litigation (n = 11), unilateral actions by brand manufacturers to delay generic competition (n = 6), noncompete agreements (n = 4), and monopolization (n = 3), with 10 outcomes involving monetary payment, totaling $1.6 billion. Of the 62 mergers the FTC challenged, 61 were allowed to continue, 58 after divesting certain drugs to third-party competitors. The FTC’s reliance on drug divestitures decreased from 18 drugs per year from 2000-2017 to 4.3 per year from 2017-2023.Conclusions and RelevanceThe FTC brought about 1 enforcement action and 3 merger actions per year against pharmaceutical manufacturers from 2000-2022, pursuing a small fraction of the estimated misconduct and consolidation in the pharmaceutical marketplace. Although the FTC faces substantial legal and practical limitations, important tools remain untested, including a rule defining “unfair methods of competition,” that may allow it to more effectively prevent repetitive patterns of anticompetitive behavior.

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