Just before Americans celebrated the Fourth of July, on June 30, 2025, antitrust enforcers from both the Federal Trade Commission (FTC) and Department of Justice Antitrust Division (DOJ) hosted the first of two listening sessions aimed at fulfilling the Trump administration’s goals of lowering drug prices through increased competition. The sessions are just one part of the Trump administration’s “Lowering Drug Prices by Once Again Putting Americans First” Executive Order, aimed at broadening the administration’s drug pricing initiatives.
This two-hour session focused on seeking input from outside panelists, who predominantly were seeking added regulation, regarding what they view as anticompetitive conduct allegedly used to “impede and reduce competition” and featured a broad spectrum of academics, practitioners, and advocates. The panelists’ views served to highlight the scrutiny that innovator pharmaceutical companies may face from the current administration. The administration has not yet provided any concrete proposals on the topic.
Patents’ Role in Drug Prices Examined
Much of the listening session focused on the complex role that intellectual property rights play in supposedly limiting generic and biosimilar competition, including the following:
- Pay-for-delay 3.0: Panelists claimed that pay-for-delay agreements have purportedly become more sophisticated, subtle, and complex, often involving non-monetary incentives to would-be generics manufacturers and other sophisticated methods designed to delay generic entry. Several panelists called for renewed FTC investigations into these allegedly more complex arrangements.
- Patent thickets: Panelists alleged that a complex network of patents often surround particular branded drugs, which can purportedly delay generic entry—even though this practice has been found not to violate antitrust law.
- Evergreening patents: Keeping with the nature theme, several panelists argued that follow-on patents helped brands allegedly insulate themselves from potential generic competition by extending patent protection on a drug, often for purportedly weak patents filed years after initial development.
Product Hopping & Other Purported Practices
Panelists also discussed the purported effects of product hopping, that is the reformulation of drugs and movement of patients to drugs without generic alternatives. Panelist Michael Carrier discussed the Drug Competition Enhancement Act introduced by Senators Cornyn, Blumenthal, Grassley, and Durbin as a possible means to address this practice by classifying product hopping as an antitrust violation subject to FTC enforcement.
The panelists also identified other conduct that they viewed as hypothetically preventing competition from generics and/or biosimilars. Panelists argued that exclusivity contracts with key intermediaries could delay entry. Likewise, device exclusivity (whether through patents or manufacturing/distribution restrictions) could also serve as a potential deterrent to new entrants in markets that require device administration. Panelists also suggested that brands purportedly spread misinformation about biosimilars with or without an interchangeable designation to deter patient switching.
PBMs
Pharmacy Benefit Managers (PBMs) were also identified as relevant actors in contributing to higher drug pricing. Panelists noted the extent to which PBMs purportedly benefit from higher rebates on brand drugs as opposed to lower-cost biosimilars. As a result, panelists claimed that PBMs have increasingly excluded biosimilars from employer plans to maintain their high market share. In addition, several panelists noted that PBMs could encourage product hopping by placing new products on their formularies, given the incentives for rebates on those branded products as opposed to alternatives.
The Road Ahead: Regulatory Reform, Enforcement, or Both?
In addition to conduct, the panel highlighted what they viewed as potential problems with the current regulatory structure and its purported contributions to drug prices. For example, multiple panelists highlighted the ways in which extended patent approval processes may serve as a barrier to entry. Consistent with task forces formed by DOJ and FTC regarding anticompetitive regulations, panelists encouraged regulators to streamline the patent approval process and eliminate the requirement for switching studies, among other changes, to allow for faster entry.
Despite the focus on what the panelists described as anticompetitive conduct, enforcement activity was not a centerpiece of the discussion. Several panelists noted that, as in other industries, enforcers could look to publicly available pricing data to identify particular drug markets that are susceptible to anticompetitive conduct. Rather than discuss any enforcement priorities, DOJ and FTC officials remained in listening mode.
Conclusion
Though the administration appears eager to even out what it apparently views as an uneven playing field for drug pricing, this first listening session focused on outside panelists’ views on the web of actors, regulations, and market forces at play. Many of the initiatives discussed, like those in Trump’s Executive Order mentioned above, would require legislative support and may spur renewed litigation. Moreover, panelists acknowledged the important role of continuing innovation, particularly with an aging population. Thus, it remains to be seen what specific policies the Trump administration will deploy with respect to drug prices, on which segments of the pharmaceutical industry their efforts will focus, and what specific role antitrust enforcement will play in achieving the administration’s objectives.
The next listening session will be held on July 24, 2025. The session will focus on the business relationship between drug manufacturers and PBMs and the potential for interagency collaboration to combat perceived anticompetitive conduct related to the regulatory process.
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