00:04And thank you for your words on public health from the ag perspective as well, Mr. Bolliard.
00:10As you know, I do a lot with ag over in the Agriculture Committee, which Senator Booker is part of as well.
00:15And thank you for being here.
00:17I did want to take off on the health care question first.
00:21And thank you for your comments, Ms. Meckie.
00:23And just specifically on pharmaceuticals.
00:26As you know, we've done a lot of work on this committee with Senator Grassley and others on the pay for delay bill that he and I have long sponsored.
00:35And we've had other legislation with a number of people on this committee to stop some sham practices.
00:42But one way there's been an abuse of rules is blocking competition is listing many patents on the FDA orange book that shouldn't be there to deter competition.
00:55The last administration issued warning letters about this practice, leading a number of drug companies to remove patents and lower prices.
01:03The Trump administration has continued this policy.
01:06Could you talk about how can antitrust enforcement deter this anti-competitive abuse of the orange book?
01:15And is it really orange?
01:17And could you describe what this is?
01:19Because it sounds kind of scary.
01:21Senator, I am thrilled that you're putting a spotlight on this.
01:26As you well know, the antitrust laws have really struggled in the pharmaceutical space to, you know, catch on a whack-a-mole kind of way practices that those with market or monopoly power are using to harm consumers in our most important markets.
01:42You're exactly right as well that there's a specific practice that's starting to get a lot of attention.
01:48When you get a new drug approved by the FDA, you tell the FDA which patents read on the drug or a relevant method of using it.
01:57That is produced in a document that only historically, I think, I'm not a farmer expert, but only historically was a physical document with an orange cover.
02:05These days it's a government database, and once that's listed, if you want to come along with a new drug, you certify to the FDA on an individual basis why each of those patents that are listed have expired, are invalid, or not infringed.
02:24And when you do that, there's a stay of about 30 months that's triggered on your application to get into the market and compete as a generic.
02:32So a manufacturer has every incentive to over-list patents that really aren't pertinent to the drug, its composition or formulation, its method of use, because it deters generic entry.
02:45There are two things that we could concretely do.
02:48Number one, to the extent that that is being done intentionally with an intention to deceive by a monopolist, that's a Section 2 violation.
02:56It's illegal monopolization, and our antitrust enforcers can take action.
02:59But that's kind of an expensive and cumbersome way to get at the problem.
03:03Two law professors, Scott Hemphill at NYU and Bhavan Sampat at Arizona State, have recently suggested we should have the U.S. Patent and Trademark Office for any patent that's newly listed in the orange book.
03:17Take a look at it.
03:18Make sure that it's valid.
03:20Make sure that it's pertinent to the drug.
03:22I think that's a terrific idea.
03:24It'll help catch abusers and monopolists, and it'll protect patients.
03:27Okay, very good.
03:29You want to add anything, Commissioner, to that?
03:31I just think those are great ideas.
03:33In addition to the ongoing enforcement efforts, and as Professor Francis pointed out, we have an active role to play here, and we are taking a close look at it.
03:40Also, I've appreciated how you've supported funding of the agencies and the like, so congratulations.
03:49Big Tech, do you think I was going to bring it up, Mr. Alford?
03:52Big Tech, do you think I was going to bring it up, Mr. Alford?
03:53So, Congress, still we have yet to enact common sense rules of the road, although Senator Lee and I worked together on the allowing state AGs, his bill, to keep the cases where they were brought, and also we've done something on merger fees that was temporarily set back,
04:11but I will say the newest budget from the administration allowed those merger fees to be charged.
04:18This is under the ongoing CR.
04:21There's a limit on them, and those merger fees, while they're collected, should be going to antitrust, as you know.
04:27So, platforms have turned into their own unaccountable regulators.
04:34Apple sets the rules for app developers, including an onerous 30% private tax, the subject of the bill that Senator Blumenthal and Senator Blackburn and I and others have taken on.
04:45Amazon does the same for independent business selling products online.
04:49Google and Facebook control much of what we see online and the advertising dollars that flow from it.
04:55Mr. Alford, in your testimony, you said that the Antitrust Division's mission is to stop cartels and monopolists from exploiting their power to act as governors of their industries.
05:08I like that. That's good.
05:09What role does antitrust law play in protecting consumers, workers, small businesses from this arbitrary regulation?
05:18Thank you for the question.
05:20Just a one-second caveat on the pharmaceutical question.
05:24On June 30th, the Department of Justice and the Federal Trade Commission is having a listening session on drug pricing pursuant to the EOs on drug pricing.
05:30Very good.
05:31To answer your question, thank you for the legislation that Senator Lee and Senator Klobuchar sponsored with respect to the budget and the fees and the merger fees going to the Department of Justice.
05:42It's incredibly helpful, and we're very encouraged by the fact that the Trump administration budget has encouraged the payment of those merger filing fees to the DOJ.
05:51With respect to platforms and the private moats that they are creating, I think that one of the goals of monopoly abuse is to basically capture the entire universe of the market action that happens within those platforms so that there is essentially no real freedom of mobility for consumers and no viable entry for other competitors.
06:13We are seeing that over and over again in most of the cases that have been brought by the DOJ relate to the kind of monopoly abuse in which there are extraordinarily high barriers to entry and in which there is no meaningful choice by publishers and advertisers in either search or in ad tech.
06:28So that is what we're seeing.
06:30There is not the migration to alternatives because of the fact that they have their entire say.
06:36And, of course, I should also add that the private litigation in Epic Games is also related to the kind of things you're talking about as well and the sort of tax on the apps, and that's also being addressed as well.
06:46So all of those kinds of litigations are addressing those concerns.
06:50Ms. Becky, as we look at why we haven't put any rules of the road in place,
06:54one of the things is these tech-funded groups have spent loads of money.
06:59They spent hundreds and hundreds of million dollars against the bill that Senator Grassley and I introduced,
07:07and I appreciated Senator Booker supporting that bill, and that's the American Innovation and Choice Act.
07:14And it passed through this committee, but then a whole lot of lobbying took place.
07:20How do dominant companies use their power to influence the government to interact rules that protect their market position
07:27and stop us from seemingly putting any rules of the road in place?
07:31I think people of all stripes agree that we need competition, and big tech is a theater that brings together a lot of people
07:39across the political continuum who are worried about competition in these markets.
07:43What I find so interesting about the tech companies is that they really resisted antitrust for a very long time
07:51and thought that was too radical and instead said, well, we'd like regulation, but wait, not that regulation.
07:58And so in the backdrop of all of that...
08:01And then they said, let the states do it, and now they're like, no, don't let the states do it.
08:04Anybody but the states, right?
08:05But in the backdrop of that, the agencies have been litigating big, sweeping monopolization cases
08:13and so far have been winning, whether it's the Google search case or the Google ad tech case.
08:20We have the meta-trial that our friends at the FTC just concluded, and we'll see what the outcome of that case is.
08:26But I think that courts are making findings that really support the underlying foundation of the legislation.
08:36And so you compare the tens of millions of dollars that the agencies had to expend just on expert fees
08:44to litigate those cases to get to outcomes that the legislation likely would have also helped us get to.
08:52So that's what I've said this many times in this very room, that if they'd work with us on some reasonable rules,
08:58we wouldn't have been where they are right now, which is two very different administrations pursuing the same cases,
09:04which is usually a sign of success if you look at AT&T and other cases from the past when it bridged political parties.
09:13Last question, Mr. Metter.
09:16The FTC enacted a number of pro-competitive rules over the last few years.
09:22They required upfront pricing to make it easier for consumers to compare prices for concert tickets, for hotel rooms.
09:29I am working to codify these changes into law, including we have a hotel bill that passed the House that just has wide, broad support.
09:40There's one senator that doesn't like it very much, so I'm trying to find a way around that one.
09:46Your colleague, Commissioner Holyoke, said she supported the rule because hidden fees undermine the ability of honest businesses to compete on price.
10:01Do you agree, and will you commit to enforcing these rules?
10:04To answer the last part, of course, yes, the FTC stands ready to enforce all of the policies that Congress sets out for us.
10:12And I agree, it is critically important that consumers have transparency and a clear sense of what price they're paying in order to have free and fair competition in the marketplace.
10:21And interestingly enough, on the hotel bill, we worked with the industry to come up with something so that we could police some of the bad actions that were going on,
10:28but they felt it was in their best interest, so did the House, and we were almost there, I think.
