FTC OKs Rule Change For Patent Deals Over Pharma Objections

In a decision that will disappoint the pharmaceutical industry, the US Federal Trade Commission has issued final changes to a so-called pre-merger notification rule that requires drugmakers to report certain proposed acquisitions of exclusive patent rights for an antitrust review. These reviews are conducted, of course, by both the FTC and the US Department of Justice. The revised rule, which drew objections from the PhRMA trade group, is designed to clarify when a transfer of exclusive rights to a patent results in a potentially reportable asset acquisition under the Hart Scott Rodino Act, according to an FTC statement. The changes, which apply only to the pharmaceutical industry, are expected to be published in the Federal Register soon and become effective 30 days later. The changes were sought because the FTC noticed that the circumstances in which exclusive patent licenses were being transferred had grown more complicated. Instead of a straightforward acquisition that provided a drugmaker with the rights to ‘make, use and sell’ a product under a patent, an evolution has occurred in which more deals involved joint development, marketing or commercialization. And so, the rule attempts to clarify the confusion. Going forward, a patent licensing arrangement constitutes an asset acquisition if a deal transfers all commercially significant rights – such as development, manufacturing or commercialization rights - to the patent in a particular therapeutic area or a specifi...
Source: Pharmalot - Category: Pharma Commentators Authors: Source Type: blogs