Antitrust Law Daily FTC takes issue with Gilead's argument that alleging multiple relevant markets is impermissible
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Monday, October 28, 2019

FTC takes issue with Gilead's argument that alleging multiple relevant markets is impermissible

By Jeffrey May, J.D.

Agency files amicus brief in suit, alleging that Gilead, a monopolist in the market for drugs that comprise the modern HIV treatment regimen, engaged in a long-running scheme to restrain competition with respect to some of the most important drugs used to treat HIV.

The FTC has submitted an amicus brief offering the federal district court in San Francisco its views on relevant market definition. The filing is in an antitrust case brought by consumers against Gilead Sciences, Inc. and others for engaging in anticompetitive conduct that has driven up prices for treatments for Human Immunodeficiency Virus (HIV) infection. The plaintiffs’ complaint alleges that at least two antitrust product markets are relevant to assessing anticompetitive effects because the challenged conduct harmed competition in multiple ways. Gilead has moved to dismiss, arguing that alleging different product markets for different types of alleged harm is improper as a matter of law (Staley Gilead Sciences, Inc., No. 3:19-cv-02573-EMC).

In its brief, the FTC challenges Gilead’s arguments that the complaint should be dismissed for failure to allege a relevant market. Gilead contends that the plaintiffs’ relevant product markets fail on the ground that they are "contradictory" and that "the pharmaceutical products at issue either are substitutable for one another, or they are not, and they cannot plausibly be both." According to the FTC, "across many different industries, courts have repeatedly recognized that multiple different relevant markets or submarkets may exist for a single class of products or services depending on the alleged anticompetitive harm."

The FTC contends that Gilead’s argument on market definition is inconsistent with core legal principles governing market definition in antitrust cases. The agency notes that market definition is merely a tool to help determine whether challenged conduct is likely to have anticompetitive effects. Thus, the brief explains, when multiple types of anticompetitive harm are alleged, multiple markets may be relevant. Market definition always requires sufficient factual support, the brief observes, but defining different product markets to assess different theories of harm is neither "contradictory" nor legally deficient, the agency contends.

The FTC took no position on the ultimate disposition of Gilead’s motion or the sufficiency of the plaintiffs’ factual allegations.

The case is No. 3:19-cv-02573-EMC.

Attorneys: Markus H. Meier, Alden F. Abbott, Bradley S. Albert, Armine E. Black, Daniel W. Butrymowicz, Rebecca L. Egeland, Elizabeth R. Hilder, D. Bruce Hoffman and Gail F. Levine for the FTC. Alberto Rodriguez (Sperling & Slater PC) and Daniel Evan Rubenstein (Radice Law Firm) for Fraternal Order of Police, Miami Lodge 20, Insurance Trust Fund and Peter Staley. Bryan Gant (White and Case LLP) for Gilead Sciences, Inc., Gilead Holdings, LLC, Gilead Sciences, LLC and Gilead Sciences Ireland UC.

Companies: Fraternal Order of Police, Miami Lodge 20, Insurance Trust Fund; Gilead Sciences, Inc.; Gilead Holdings, LLC; Gilead Sciences, LLC; Gilead Sciences Ireland UC

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