Antitrust Convergence in a Divergent Regulatory Environment: The IPEGs' Treatment of Reverse Payment Settlements of Pharmaceutical Litigation

Abstract

Much effort has been spent promoting the convergence of antitrust law globally. While there has been a degree of convergence over time, such convergence in antitrust law often takes places in the presence of significant differences in other regulatory schemes. The legal framework applicable to reverse payment settlement of pharmaceutical litigation shows how antitrust convergence can lead to significant problems in the presence of divergent regulatory schemes that overlap with the scope of antitrust law. In 2016, the Competition Bureau promulgated its Intellectual Property Enforcement Guidelines. A significant component of the IPEGs was the Competition Bureau’s indication that it would review reverse payment settlements of litigation under the PM(NOC) Regulations for antitrust concerns, generally under s. 90.1 of the Competition Act. While some reverse payment settlements undoubtedly can have anticompetitive effects, unique institutional features of Canadian pharmaceutical litigation mean that reverse payment settlements are and should be less of a cause for concern here than they are in the United States. At a result, policymakers should be cautious before transporting American antitrust principles north of the border in the name of promoting convergence in antitrust law. In at least some cases, the effect of the IPEGs may be to deter parties from entering into settlement agreements which have significant social value. Moreover, even if reverse payment settlements are a cause for antitrust concern, the approach set out in the IPEGs is likely not an effective means of addressing those concerns. This article suggests that reform of the IPEGs is required, and it proposes both wholesale and narrow changes that would improve their operation.