Since her confirmation as the new Assistant Attorney General of the Antitrust Division in April 2009, Christine Varney has delivered a series of speeches that has made clear that the Department of Justice intends to step up antitrust enforcement.

One of the areas under increased scrutiny is industry-specific exemptions from the antitrust laws, including the health care insurance industry.  With the heated debate over health care reform legislation now underway, any enforcement efforts related to health care would draw considerable attention.

Before enforcement could occur, however, the insurance industry’s long-standing exemption from the antitrust laws under the McCarran-Ferguson Act would have to be repealed.  Health insurers’ antitrust exemption would be repealed under the health care reform bill that passed the U.S. House of Representatives on November 7, 2009.

Ms. Varney supports repeal of the exemption, and testified before a Senate Judiciary Committee hearing in October in favor of ending the insurance industry’s exemption from price fixing, bid rigging and market allocation claims. click here for more »

Three Democrats in the House of Representatives are pushing to roll back heightened pleading standards adopted by the Supreme Court that have led to thousands of antitrust and other cases being dismissed at the pleading stage.

The legislators are taking aim at two recent Supreme Court decisions that make it more difficult for plaintiffs to have their civil cases heard in federal court.  In an antitrust case, the Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) held that to survive a motion to dismiss, a complaint must include “enough facts to state a claim to relief that is plausible on its face.”  The Court went one step further in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), by holding that Twombly’s “plausible” pleading standard applied to all civil cases.      

Congressmen Jerrold Nadler (D-NY), John Conyers (D-MI), and Henry Johnson (D-GA) are currently working on a bill that would override the Iqbal decision to make it easier for plaintiffs to survive a motion to dismiss by relaxing the “plausibility” standard.  They seek to restore the standard to the precedent followed by federal courts for 50 years after the Supreme Court’s decision in Conley v. Gibson, 355 U.S. 41 (1957).  The accepted rule under Conley was that “a complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”  355 U.S. at 45-46. click here for more »

 Two recent antitrust cases in China indicate that country may be inching its way toward fulfilling its potential as a modern economy by embracing competition law.

It was only in August 2008 that the world’s third largest economy joined the ranks of countries with private competition law regimes with China’s adoption of its new Anti-Monopoly Law (AML).

The AML generally resembles the basic framework of the American and European antitrust regimes, in the sense that it sets forth broad guidelines for dominant-firm conduct, collusion and mergers and acquisitions.  And it allows private parties – not just the government – to enforce the law through lawsuits.  Recent outcomes in two such cases suggest that private litigation under the AML will be robust, giving Chinese lawyers no shortage of work.

The Shanda-Sursen case, decided on October 23, 2009, produced the first court decision interpreting the AML’s dominant-firm provisions. click here for more »

The Second Circuit’s recent decision in In re DDAVP Antitrust Litigation marks a significant development in the intersection of antitrust and patent law.  Consumers now have greater standing to assert antitrust claims involving unenforceable patents.

The Court vacated and remanded a lower court’s dismissal of a purchaser’s antitrust claim against manufacturers for conspiring to keep generic versions of a drug unavailable to consumers.  The plaintiffs were supported in their appeal by many entities that filed amicus briefs including the FTC and the National Association of Attorney Generals on behalf of several states.  While the plaintiffs would not have had standing to challenge the underlying patent, the fact that the patent was already determined to be unenforceable allowed the Walker Process analysis to proceed. click here for more »

Merck’s acquisition of Schering-Plough is plowing ahead as the companies addresses competitive concerns raised by antitrust enforcers.

 In an October 29, 2009, Consent Order, the FTC is permitting the acquisition – which would result in the one of the world’s largest prescription drug companies – to go forward provided the two companies divest of certain assets.  The European Union granted a smooth approval to the companies’ merger just a week earlier.

 The divestitures required by the FTC are already well underway.  As discussed in an earlier post, the anticipation and remedying of potential objections by regulators has allowed the Merck and Schering-Plough deal to progress.  In addition to the EU, Canadian and Swiss antitrust authorities have also given the green-light for this acquisition to continue.  The transaction still needs to obtain approval from other regulators, including Mexico and China before its anticipated close in the fourth quarter of 2009. 

 The main hurdle for FTC clearance was the concern regarding the parties’ animal health operations, but, as discussed earlier, Merck has already taken steps to divest itself of its shares in Merial, its animal health joint venture with Sanofi-Aventis.  This approval signifies that Merck and Schering-Plough have satisfied the issues raised in the FTC’s June 22, 2009, second request.

 The successful merger of the two companies would result in the world’s second largest prescription drug companies – behind only Pfizer, Inc.