Watchdog would like to offer a somewhat bold assertion: Arguably the most consequential pharma development last month was not a pipeline deal or product approval. It was a friend-of-the-court brief, the legal equivalent of a spectator leaning over the rail to tell the umpire he is reading the rulebook wrong.
On June 23, the Federal Trade Commission (FTC) filed that brief at the Fourth Circuit, in an antitrust appeal involving Johnson & Johnson and its blockbuster biologic Stelara. The agency did not take a side on whether the plaintiffs should win. It took a side on something far more lasting: the legal test for monopolization itself, which outlives any single lawsuit and quietly shapes how everyone behaves.
In this case, the health insurer CareFirst of Maryland alleges that when J&J acquired Momenta Pharmaceuticals it used the patents it picked up to improperly delay biosimilar competition to Stelara for more than a year. An Eastern District of Virginia court handed J&J summary judgment, reasoning that the plaintiffs had not shown the pharma giant specifically intended to exclude its rivals.
The FTC says that ruling gets the law backwards. Under Section 2 of the Sherman Act, the agency argues, a monopolist needs only the general intent to perform the acts that maintain its monopoly. It does not need to be caught twirling its mustache.
That distinction sounds academic until you are the one being deposed. Johnson & Johnson’s defense is the one nearly every innovator reaches for: we were simply enforcing patents we lawfully acquired, which is ordinary competitive behavior.
The FTC’s position is that lawful conduct (buying patents, asserting them, settling around them) can still break the antitrust laws if its effect is to wall off competition, no matter the motive in the deal memo.
The agency is careful to add that it takes no position on whether these plaintiffs would win under the corrected standard. It just wants the standard fixed, and if the judiciary agrees, the FTC’s interpretation will apply to you next.
A Problem Most Firms Would Love To Have
In legal parlance, the “harm” the case revolves around concerns a product that earned roughly eleven billion dollars at its 2023 peak. Stelara’s revenue has since slid about 40 percent as biosimilars arrived, which sounds like a catastrophe right up until you do the arithmetic and realize that 40 percent off eleven billion is still the kind of decline most biotech founders would cheerfully trade their entire pipeline to experience.
A blockbuster losing altitude is a genuine problem. It is also the precise problem every reader of this column is quietly praying to one day have.