Expanded HSR Antitrust Reporting For Pharma Licensing Deals Is Here To Stay

On June 9, 2015, the U.S. Court of Appeals for the D.C. Circuit, in its ruling in Pharm. Research & Mfrs. of Am. v. FTC, upheld the FTC's expansion of HSR reporting requirements for pharmaceutical companies, and solidified the need for companies entering into licensing agreements in the industry to consider their HSR filing obligations and the implications for antitrust review.

In the court's decision, Senior Circuit Judge Edwards rejected the pharmaceutical industry's arguments that the new rule would bring delay, increased cost, and uncertainty to transactions, as well as the argument that the promulgation of such a rule was outside the scope of the FTC's rulemaking authority. Instead, the court sided with the FTC's arguments that in the pharmaceutical industry, the right to commercialize is so superior to the right to manufacture that the transfer of commercialization rights alone essentially is equivalent to the sale of all patent rights. Given this, the licensing