Third Circuit: Product hopping not per se illegal

“Product hopping” occurs when a drug maker creates a new version of their drug. The drug maker “hops” from one version (a 75mg tablet) to a new version (a 150mg tablet). The changes are not usually related to the efficacy of the drug. Perhaps the new version has to be taken less often.

But the hop can complicate generic substitutions. A generic (cheaper) drug must be shown bioequivalent to receive fast approval and allow pharmacists to make substitutions. The alleged goal of many product hops is to complicate the ability of generics to compete.

Does product hopping violate antitrust laws? Not without good evidence of monopoly power.

In a Sept. 28, 2016 decision the Third Circuit concluded there was insufficient evidence that the makers of Doryx acne medication had sufficient market power to support a claim for antitrust.

Takeaway: product hopping isn’t per se illegal and won’t necessarily be analyzed any differently from other alleged antitrust violations. Indeed the Third Circuit echoed concerns by the District Court that product hopping allegations could discourage routine innovation:

The prospect of costly and uncertain litigation every time a company reformulates a brand-name drug would likely increase costs and discourage manufacturers from seeking to improve existing drugs.