Filed, Not Forgotten: FTC Signals Antitrust Scrutiny of Patent Application Acquisitions in Biologic Drug Markets

Background: A Blockbuster Drug and a Long-Running Patent Strategy 

Enbrel (etanercept) is one of the best-selling biologic drugs in the United States, approved to treat rheumatoid arthritis and other serious inflammatory conditions. Etanercept was launched as Enbrel in 1998 as a treatment for moderate to severe rheumatoid arthritis, and was later approved to treat additional inflammatory diseases including plaque psoriasis, psoriatic arthritis, ankylosing spondylitis, and polyarticular juvenile idiopathic arthritis.  

Amgen obtained the Enbrel intellectual property through its acquisition of Immunex in 2002. According to the plaintiffs, as Amgen's key Enbrel patents faced expiration in 2012 — opening the door to biosimilar competition — it took steps to shore up its patent position.  Specifically, Amgen purchased Roche's remaining rights in a family of pending patent applications (the "Brockhaus Patents") in 2004, becoming the exclusive licensee and enabling it to further prosecute and amend those pending applications to ensure maximum protection for Enbrel.  CareFirst alleges that by amending these pending applications, Amgen was able to extend patent protection of Enbrel to 2029, resulting in overcharges of hundreds of millions of dollars per year to purchasers due to the absence of biosimilars on the market.  

The plaintiffs sued Amgen, alleging that its acquisition of these pending patent applications violated Section 2 of the Sherman Act. Specifically, Amgen acquired exclusive rights to applications with the potential to cover Enbrel and then used those applications to obtain patent claims that it leveraged to extend its monopoly and block lower-cost competitors.  

The U.S. District Court for the Eastern District of Virginia denied Amgen's motion to dismiss the Sherman Act claim, finding that while the prosecution and enforcement of the patents, as acts of petitioning the government, were immune from antitrust liability, the act of purchasing the Brockhaus Patent rights was not.  Amgen has now appealed, arguing that the acquisition of patent applications can never constitute anticompetitive conduct under Section 2, and that its acquisition is immune from antitrust liability under the Noerr-Pennington doctrine because it subsequently prosecuted the applications before the USPTO and enforced the issued patents in federal court.  

The FTC’s Core Arguments 

The FTC's amicus brief, filed in the U.S. Court of Appeals for the Fourth Circuit, argues that private commercial agreements acquiring the rights to patent applications are subject to antitrust scrutiny, just like acquisitions of issued patents.  The Commission advances three related arguments that life sciences and health care industry participants should closely track. 

• Patent applications carry real exclusionary power. The brief identifies several ways in which control of a pending patent application, even before it becomes a granted patent, can result in unique anticompetitive harms and help a company exclude competitors from the market.  These aspects of patent applications may give a monopolist greater control to shape the exclusionary scope of the eventual patent, allowing it to increase its monopoly in ways that an issuing patent's fixed claims would not permit.  In other words, an application is not merely a placeholder — it is a strategic tool that a well-resourced monopolist can actively steer. 

• The Noerr-Pennington doctrine does not protect private commercial deals. The FTC argues that while the Noerr-Pennington doctrine may protect certain petitioning activity, such as prosecuting patent applications before the USPTO or enforcing patents in court, it does not extend to the underlying private commercial transaction of acquiring those applications.  The Commission draws a clear line: engaging with the government is protected; buying private assets to position yourself to engage with the government is not. 

• Drug pricing and patient access are squarely at stake. The FTC filed the amicus brief given its strong interest in promoting competition and in ensuring the proper application of federal antitrust laws, including at the intersection of patent law and antitrust law.  The Commission vote authorizing the brief was 2-0.  

What This Means for Business 

An enforcement signal. The FTC’s decision to intervene as amicus at the Fourth Circuit is deliberate. The Commission is signaling that patent application acquisitions are now within its antitrust crosshairs. Companies that rely on acquiring third-party patent applications to fortify a branded drug’s lifecycle should expect heightened scrutiny of those deals, both in subsequent litigation and in any government review. This is consistent with the FTC’s related challenges to drug patents that it alleged were improperly listed in the FDA’s Orange Book.  Crowell attorneys issued analyses of those past actions here and here.  

Broader implications for biologics and pharma M&A. Biologics are the fastest-growing class of medications in the United States, and Congress created the biosimilar approval pathway precisely to promote competition and patient access.  The FTC’s brief makes clear that antitrust law will be applied to conduct that impedes that competitive framework — not only through sham litigation or improper Orange Book listings, but through the upstream acquisition of IP rights that can be shaped into exclusionary weapons. Pharmaceutical and biotech companies structuring licensing deals, asset purchases, or co-development arrangements involving pending patent applications need to think carefully about how those transactions will look through an antitrust lens. 

Competitor and investor takeaways. For biosimilar developers and health plans, the FTC’s brief is an encouraging development: it reinforces that a monopolist cannot simply purchase its way to indefinite exclusivity by acquiring control of pending patent portfolios. For branded manufacturers, the message is the opposite, and the timing, structure, and purpose of patent application acquisitions should be stress-tested against Section 2 monopolization standards before closing. Investors evaluating biologics companies should also treat material patent portfolio acquisitions as potential antitrust risk events, particularly where the target IP covers a high-revenue reference product facing near-term biosimilar competition. 

Looking Ahead 

The Fourth Circuit’s ruling in CareFirst v. Amgen will have consequences well beyond this single dispute. If the court affirms that patent application acquisitions are fair targets for antitrust scrutiny, and are not shielded by Noerr-Pennington, it will reshape how life sciences companies structure and justify patent portfolio transactions for years to come. We will continue to monitor the case and assess developments as they unfold. 

If you have any questions regarding the FTC’s amicus brief or how these developments may affect your business, please reach out to the attorneys listed below.