21-1 Baxalta, Emergent BioSolutions, Grifols Therapeutics, and CSL Plasma

U.S. DEPARTMENT OF JUSTICE
Antitrust Division
MAKAN DELRAHIM
Assistant Attorney General
Main Justice Building
950 Pennsylvania Avenue, N.W.
Washington, D .C. 20530-0001
(202) 514-2401
I (202) 616-2645 (Fax)
January 12, 2021
Ms. Sara
Y. Razi, Esq.
Simpson Thacher & Bartlett LLP
900 G Street,
NW
Washington, D.C. 20001
Re: Request for COVID-19-Related Business Review Letter
Dear Ms. Razi:
This letter responds to your request on
behalf of Baxalta US Inc., Emergent
BioSolutions Inc., Grifols Therapeutics LLC, and CSL Plasma Inc., and each
of those
companies' respective subsidiaries and affiliates (altogether, the "Requesting Parties" and
each independently, a "Party") for the issuance
of a business review letter under the
Department
of Justice's (the "Department") Business Review Procedure, 28 C.F.R. § 50.6.
Specifically, the Department understands that your request is made under the expedited,
temporary review procedure
as detailed in the Joint Antitrust Statement Regarding
COVID-19 (the "Joint Statement") dated March 2020.
1
As indicated in the Joint Statement,
the Department's statement
of its current enforcement intentions, as set out in this letter,
will be in effect for one year from the date
of this letter. The Requesting Parties
subsequently may request, using this expedited, temporary procedure, that the Department
reiterate its current enforcement intentions,
if further time is necessary to respond to the
unprecedented COVID-19 pandemic and its aftermath.
You have requested a statement
of the Department's current antitrust enforcement
intentions with respect to your efforts to assist the Biomedical Advanced Research and
Development Authority ("BARDA") in the development
of a Quality Assurance
Addendum that provides technical parameters for blood banks. These parameters would
allow COVID-19 convalescent plasma collected by blood banks for direct transfusion
under Operation Warp Speed to be repurposed for use in the manufacture
of each
Requesting Party's hyperimmune globulin ("Hig") therapies targeting COVID-19 (the
1
Dep't of Justice & Fed. Trade Comm., Joint Antitrust Statement Regarding COVID-19 (Mar. 2020),
https:/ /www.justice.gov/atr/joint-antitrust-statement-regarding-covid-l
9.

Ms. Sara Y. Razi, Esq.
January 12, 2021
Page 2
"Proposed Conduct").
2
Based on the information and representations you provided, and
after an expedited review, the Department, for the reasons explained below, presently does
not intend to challenge the Requesting Parties' efforts to develop a Quality Assurance
Addendum that provides technical parameters to ease and accelerate the development and
manufacture
of HIg therapies.
I. The Requesting Parties' Efforts to Develop Hlg Therapies Using COVID-19
Convalescent Plasma
a. Background
This request arises in the context of the national health crisis caused by the novel
coronavirus known as SARS-CoV-2, which threatens the health, safety, and security
of
millions of Americans. In response to the ongoing COVID-19 pandemic, the National
Institutes
of Health ("NIH") is sponsoring clinical trials to develop HIg therapies for
COVID-19.
3
The Requesting Parties are participating in NIH' s clinical trials to develop
their respective
Hig therapies by using plasma collected from individuals who have
contracted and recovered from COVID-19, also known as "COVID-19 convalescent
plasma."
4
In addition to participating in these NIH trials, the Requesting Parties generally are
"competitors in the commercial areas
of plasma collection and development of plasma­
derived therapies."
5
Given that convalescent plasma cannot be developed artificially,6 the
Requesting Parties have two main sources
of plasma: source plasma and recovered plasma.
Source
plasma is plasma collected through plasmapheresis, a process that takes only
plasma from a human donor and returns the other cellular components to the donor.
7
Recovered plasma is produced by separating blood into its cellular components, typically
collected from blood donation centers.
It then undergoes testing to confirm that the plasma
meets U.S. Food and Drug Administration's ("FDA") rules and regulations,
8
and each party
determines whether it is suitable for their respective needs. The Requesting Parties then,
2
Letter from Sara Y. Razi, Esq., to the Hon. Makan Delrahim, Ass't Att'y Gen., Antitrust Division,
U.S.
Dep't of Justice (Jan. 5, 2021) [hereinafter "Request Letter"].
3
Id. at 1 n.2.
4
Id. The specific clinical trial in which the Requesting Parties are contributing is the Phase III clinical
trial called the Inpatient Treatment with Anti-Coronavirus Immunoglobulin, also known as
INSIGHT 013.
See Press Release, National Institutes of Health, "NIH Clinical Trial Testing
Hyperimmune Intravenous Immunoglobulin Plus Remdesivir to Treat COVID-19 Begins," (Oct.
8,
202 0), https ://www.nih.gov/news-events/new s-releases/nih-clinical-trial-testing-hyperimmune­
intr avenous-immunoglobulin-plus-remdes
ivir-treat-covid-19-begins.
5
Request Letter at 2.
6
Id.
7
See 21 C.F.R. § 640.60.
8
The FDA promulgates rules, regulations, and licenses regarding the development, manufacture, and
usage
of Hlg therapies, including COVID-19 convalescent plasma, and licensure of blood banks.
See generally 21 C.F.R. § 640.

Ms. Sara Y. Razi, Esq.
January
12, 2021
Page 3
in competition with one another, develop and manufacture plasma-based therapies using
proteins that remain in the plasma through fractionation.
As part of Operation Warp Speed, the federal government is working to accelerate
and to support the development, manufacture, and distribution
of treatments that target
COVID-19.
9
Specifically, the federal government is supporting the collection of COVID-
19 convalescent plasma through BARDA' s supply contracts with America's Blood
Centers, the American Red Cross, and potentially other COVID-19 convalescent plasma
collection blood banks (collectively, the "Blood Banks").
10
The primary intent under these
contracts currently
is to use the COVID-19 convalescent plasma for direct transfusion. The
federal government also is supporting the development
of Hlg products and "has engaged
the Requesting Parties
to ensure that the collected COVID-19 convalescent plasma, and
specifically excess stores
of convalescent plasma collected by the Blood Banks under
contract with BARDA but not needed or appropriate for direct transfusion, can be
repurposed for use in the Parties' Hlg therapies for COVID-19."
11
To facilitate a seamless redirection and repurposing of COVID-19 convalescent
plasma, BARDA seeks to develop a "single set
of Quality Assurance parameters to be
implemented by the Blood Banks,
as an addendum to BARDA's existing convalescent
plasma supply agreements with the Blood Banks" (the "Quality Assurance Addendum").
12
The purpose of the Quality Assurance Addendum is to ensure that "COVID-19
convalescent plasma collected by the Blood Banks under contract with BARDA would
meet the requirements
of each participating Party as a manufacturer of Hlg therapies
targeting COVID-19,
as well as all requirements for the manufacture of Hlg therapies
targeting COVID-19
as set by FDA."
13
BARDA therefore plans to develop the Quality
Assurance Addendum in coordination with the Requesting Parties.
14
b. The Requesting Parties' Proposed Conduct
The Requesting Parties seek to assist BARDA in the development of the Quality
Assurance Addendum according to the following procedures. BARDA first would develop
a draft Quality Assurance Addendum and share it with the Requesting Parties. After
reviewing the draft,"[e] ach Requesting Party would comment on the template individually
and provide its comments only to BARDA and not
to any other Requesting Party."
15
BARDA then would convene at least one meeting collectively with the Requesting Parties
9
Dep't of Health and Human Serv's, Trump Administration Announces Framework and Leadership
for 'Operation Warp Speed', (May 15, 2020), https://www.hhs.gov/about/news/2020/05/15/trump­
administration-announces-framework-and-leadership-for-operation-warp-speed.html.
10
Request Letter at 1-2. BARDA
is part of the U.S. Department of Health and Human Services.
11
Id at 2-3.
12
Id at 3.
13
Id
14
Id
15
Id

Ms. Sara Y. Razi, Esq.
January
12, 2021
Page 4
"
to discuss and finalize the parameters of the proposed Quality Assurance Addendum."
16
Once the draft Quality Assurance Addendum is finalized, BARDA then would confirm
with the Blood Banks and the FDA that the Addendum is agreeable, and BARDA may
invite the Requesting Parties to join these future conversations
as well.
17
Direct
communications between the Requesting Parties will occur only in the presence
of an
official from BARDA. BARDA will seek
to limit the frequency of direct joint discussions
as much as possible. Any live discussions involving the Requesting Parties will be held
only on an "as-needed basis" with counsel present.
18
The Proposed Conduct also is clear about practices the Requesting Parties do not
seek the Division's prior review of at this time:
• "there will be
no disclosure or discussion by the Requesting Parties of
information regarding pricing, volumes of source plasma collected,
volumes
of their respective Hlg products expected to be produced, or any
other data that would traditionally be considered competitively sensitive,"
• "none
of the Requesting Parties would discuss or disclose commercial
information related to their individual ordinary course supply contracts with
blood centers," and
• the Requesting Parties
do not anticipate that they will engage in discussions
with BARDA regarding the allocation or distribution among them
of
COVID-19 convalescent plasma.
19
To the extent the Requesting Parties later engage in this or other conduct excluded from
the Request Letter, this letter takes no position on that conduct.
The Requesting Parties also have entered into a Confidential Disclosure
Agreement, which "outlin[
es] the narrow scope of technical information that the
Requesting Parties would provide
to BARDA and potentially also discuss jointly in
discussions that would include BARDA, the Requesting Parties, the Blood Banks, and/or
FDA."
20
The categories of information to be discussed and shared would be "technical in
nature and focused on the quality requirements for the Blood Banks' collection processes
16
Id.
17
Id.
18
Id.
19
Id.
at 3 n.4, 5.
20
Id. at 4. The Requesting Parties submitted the Confidential Disclosure Agreement to the Department
and incorporated it
by reference into the Business Review Letter Request. The Requesting Parties
submitted a timely request pursuant to 28
CFR § 50.6(c) for the Confidential Disclosure Agreement
to remain confidential. After reviewing the Requesting Parties' request, the Department found good
cause for non-disclosure.

Ms. Sara Y. Razi, Esq.
January 12, 2021
Page 5
under BARDA's existing supply contracts."
21
The parameters include sampling, testing,
labeling, titering, anticoagulants, and storage specifications.
22
The Confidential Disclosure Agreement also contains several provisions limiting
the use and dissemination
of information acquired by the Requesting Parties. The
Requesting Parties agreed that any information to be shared shall be used by each Party
solely for the development
of the Quality Assurance parameters and submission for
required regulatory approvals.
23
Disclosure of information is limited to a "need-to-know"
basis within each company.
24
Upon termination of the Confidential Disclosure Agreement,
the Parties shall cease to use any shared information from another party.
25
Finally, no Party
will acquire the intellectual property or know-how
of another Party under the Confidential
Disclosure Agreement.
26
II. Legal Framework & Analysis
a. The Competitor Collaboration Regarding the Proposed Conduct Should
Be Analyzed Under the Rule of Reason
Under the joint FTC/DOJ Competitor Collaboration Guidelines (the
"Guidelines"),
27
the Proposed Conduct would be evaluated under the rule of reason. Per
se
treatment is appropriate only for "[ a]greements of a type that always or almost always
tends to raise price or to reduce output. "
28
These types of agreements include "agreements
among competitors to fix prices or output, rig bids, or share or divide markets by allocating
customers, suppliers, territories, or lines
of commerce."
29
The Proposed Conduct does not
involve such an agreement but rather is focused on information sharing to assist the federal
government in expanding output
of Hlg therapies. Thus, the per se rule does not apply,
and the Proposed Conduct is subject to the rule
of reason.
In analyzing conduct using the rule
of reason, "the central question is whether the
relevant agreement likely harms competition by increasing the ability or incentive
profitably to raise price above or reduce output, quality, service, or innovation below what
likely would prevail in the absence
of the relevant agreement. "
30
As the Requesting Parties
21
Id.
22
Id.
23
Confidential Attachment I to Request Letter at 2 [hereinafter "Confidential Disclosure
Agreement"].
24
Id. at 3.
25
Id. at 3-4.
26
Id.
27
Fed. Trade Comm'n & U.S. Dep't of Justice, Antitrust Guidelines for Collaborations Among
Competitors (2000), https://www.justice.gov/atr/page/file/1098461/download [hereinafter
"Competitor Collaborations Guidelines"].
28
Id. § 3.2.
29
Id.
30
Id.
§ 3.3.

Ms. Sara Y. Razi, Esq.
January
12, 2021
Page 6
note in their Request Letter, the Guidelines recognize that "a competitor collaboration may
enable participants
to offer goods or services that are ... brought to market faster than
would
be possible absent the collaboration."
31
Additionally, "[t]he Agencies recognize
that the sharing
of information among competitors may be procompetitive and is often
reasonably necessary
to achieve the procompetitive benefits of certain collaborations."
32
b. The Proposed Conduct Appears to Lack Significant Risk of
Anticompetitive Effects
The Proposed Conduct includes several features that minimize the potential for
anticompetitive harm arising from the collaboration. Most importantly, the information
that may be shared by the Requesting Parties is technical in nature and does not involve
"price, output, costs, or strategic planning" which are more likely
to raise competitive
concerns.
33
Although sharing even only technical information may sometimes lead to
anticompetitive effects, such as by facilitating collusion on the upper bounds of quality or
the production limitations faced by competitors, such circumstances
do not appear to be
present here. Indeed, the vast majority
of the quality assurance parameters to be discussed
are driven by FDA regulations and not specific
to each Requesting Party. The Parties will
retain commercial control over each
of their HIg therapies and will continue to compete
independently in offering any approved therapies to the public.
34
Moreover, this
collaboration
is led by a government agency, BARDA. BARDA will be responsible for
reconciling and consolidating the initial sets
of comments, submitted unilaterally by the
Requesting Parties, on the draft Quality Assurance Addendum.
35
This approach has the
benefit
of anonymizing specific changes proposed by a given Requesting Party and does
not require the Requesting Parties
to disclose their specific requirements. Instead, each
Requesting Party only needs
to review the draft Addendum and comment to BARDA to
the extent it fails to meet their requirements. In addition, to the extent joint discussions of
the quality assurance parameters are required, an official from BARDA will be present for
any direct communications between the Requesting Parties, and any live discussions only
will take place as-needed and with counsel present.
36
This should serve to limit the number
of direct communications between the Requesting Parties and ensure that the scope of those
communications remain within the confines
of the technical requirements. Finally,
BARDA, not the Requesting Parties, will "serve
as the central authority and decision­
maker in presenting the final Quality Assurance Addendum
to the Blood Banks and FDA
for their respective approvals," ensuring the collaboration ultimately serves to further
BARDA's purposes.
37
Accordingly, the conduct poses little risk of anticompetitive harm.
31
Id.§ 2.1.
32
Id. § 3.3 l(b).
33
Id.
34
See Request Letter at 2.
35
See id. at 3.
36
Id.
37
Id. at 5.

Ms. Sara Y. Razi, Esq.
January 12, 2021
Page 7
Further, the Confidential Disclosure Agreement signed by the Requesting Parties
provides additional safeguards that minimize the potential for anticompetitive harm arising
from their collaboration. For example, the Confidential Disclosure Agreement limits the
scope and duration
of the collaboration to the finalization of the Quality Assurance
Addendum.
38
In terms of scope, only technical specifications will be discussed, and only
for the purpose
of ensuring the Blood Banks collect COVID-19 convalescent plasma that
the Requesting Parties can use to develop and produce HIg therapies.
39
In terms of
duration, because the Quality Assurance Addendum will be added to BARDA's existing
contracts with the Blood Banks, the results
of the Requesting Parties' collaboration will
terminate when those contracts terminate.
40
The Confidential Disclosure Agreement also
provides for usage and disclosure limitations by the parties for information that they
receive.
41
The Requesting Parties participation in future discussions with BARDA and the
Blood Banks and/or FDA, already subject to the discretion
of BARDA, is limited further
by the Confidential Disclosure Agreement, which outlines the information the Requesting
Parties may discuss jointly at such meetings as being limited to a "narrow scope
of
technical information. "
42
c. The Proposed Conduct Also Appears to Have Several Procompetitive
Justifications
As the Department has stated previously, collaboration among competitors in aid
of a federal agency may offer unique benefits and therefore be consistent with the antitrust
laws, even
if that collaboration may not satisfy the standards for federal instrumentality
immunity.
43
For example, the collaboration might allow a federal agency to "respon[d] to
exigent circumstances [ and] provide Americans with products or services that might not
be available otherwise" more immediately, efficiently, and effectively than
if firms worked
38
See Confidential Disclosure Agreement.
39
See id.
40
Request Letter at 5.
41
See Confidential Disclosure Agreement.
42
Request Letter at 4.
43
Letter from the Hon.
Makan Delrahim, Ass't Att'y Gen., Antitrust Division, U.S. Dep't of Justice,
to Lori
A. Schechter, McKesson Corp., Jessica L. Mayer, Cardinal Health, Inc., Michael S. Ettinger,
Henry Schein, Inc.,
Alex Liberman, Medline Indus., Inc., & Nicholas J. Pace, Owens & Minor, Inc.,
(Apr. 4, 2020).
See also, Letter from J. Mark Gidley, Acting Ass 't Att'y Gen., Antitrust Division,
U.S.
Dep't of Justice, to Stuart M. Pape, Patton, Boggs & Blow (Jan. 14, 1993) ("Gidley Letter"),
https :/
/www.justice. gov/ atr/response-association-official-analytical-chemists-request-business­
review-letter ( concluding that a working group, formed at the request
of HHS to help the agency
develop tests for smokeless tobacco, was "unlikely to
be anticompetitive and [ would instead]
facilitate a new, standardized means
of testing the content of smokeless tobacco not currently
available").
See also Byers v. Intuit, Inc., 600 F.3d 286, 295 (3d Cir. 2010); Name.Space, Inc. v.
Network Sols., Inc.,
202 F.3d 573, 581-84 (2d Cir. 2000); Phillip E. Areeda & Herbert Hovenkamp,
Antitrust Law:
An Analysis of Antitrust Principles and Their Application ¶252. ( 4th ed. 2018) ("The
relevant question
is the degree to which the immune federal agency asserts 'plenary control' over
the private party with
whom it has a contract.").

Ms. Sara Y. Razi, Esq.
January 12, 2021
Page 8
on their own or even bilaterally with the agency.
44
The Department reiterates that its
assessment
of efforts to address COVID-19 and its immediate aftermath accounts for these
unique procompetitive benefits
as appropriate.
Based on the Requesting Parties' representations, the Department understands that
the Proposed Conduct is just such a collaboration because it appears likely to be output and
efficiency-enhancing. Specifically, the Proposed Conduct will ensure that the COVID-19
convalescent plasma collected by the Blood Banks under their contracts with BARDA will
be more efficiently and quickly re-purposed for use in manufacturing HIg therapies.
45
Further, the Proposed Conduct may facilitate the ongoing NIH clinical trials for HIg
therapies, which may show that COVID-19 convalescent plasma is more efficaciously
deployed in HIg therapies rather than through direct transfusion. In that case, the Proposed
Conduct would provide BARDA with important information to help direct the COVID-19
convalescent plasma collected by the Blood Banks wherever it can be used most
efficaciously. By coordinating with all
of the Requesting Parties in the development of the
Quality Assurance Addendum, BARDA ensures that any COVID-19 convalescent plasma
that it wants to re-purpose can be used by each
of the Requesting Parties, thereby increasing
BARDA's flexibility when it decides to re-purpose COVID-19 convalescent plasma.
Ultimately, the Proposed Conduct will help BARDA develop the Quality
Assurance Addendum which will "ensure that COVID-19 convalescent plasma collected
by the Blood Banks under contract with BARDA would meet the requirements
of each
participating Party
as a manufacturer of HIg therapies targeting COVID-19."
46
· To the
extent those therapies are safe and effective, the Proposed Conduct could therefore improve
the health and safety
of Americans. Based on the representations of the Requesting Parties,
including the safeguards discussed above, and given the current circumstances, the
Department is satisfied that this conduct offers unique procompetitive benefits under the
exigent circumstances presented by COVID-19 that outweigh any potential for
anticompetitive harm.
d. Some of the Proposed Conduct May Implicate Noerr-Pennington
In certain circumstances, "courts have conferred 'petitioning immunity'" on
collaborators' efforts to jointly petition the government to take a particular action under the
Noerr-Pennington doctrine.
47
"The scope of this protection depends ... on the source,
context, and nature
of the anticompetitive restraint at issue."
48
To the extent the Requesting
Parties seek to influence BARDA's policy decisions, some aspects
of the Proposed
44
Dep't of Justice & Fed. Trade Comm., Joint Antitrust Statement Regarding COVID-19 (Mar. 2020),
https://www.justice.gov/atr/joint-antitrust-statement-regarding-covid-19; see also Gidley Letter.
45
Request Letter at
3.
46
Id.
47
Letter from the Hon. Makan Delrahim, Ass't Att'y Gen., Antitrust Division, U.S. Dep't of Justice
to John
G. Chou, AmerisourceBergen at 11-12 (Apr. 20, 2020),
https :/ /www.justice.gov/atr/page/file/ 1269911 / download.
48
Allied Tube
& Conduit Corp. v. Indian Head, Inc., 486 U.S. 492,499 (1988).

Ms. Sara Y. Razi, Esq.
January
12, 2021
Page 9
Conduct may implicate Noerr-Pennington.
49
It is unnecessary to resolve this question,
however, because the Proposed Conduct clearly is procompetitive for the reasons described
above.
III. Conclusion
This letter is predicated on the accuracy of the information the Requesting Parties
have provided. This letter expresses the Department's current enforcement intention in the
exercise
of its prosecutorial discretion. It reflects the outcome of an expedited, temporary
review procedure that necessarily is less thorough than ordinary business review
procedures. This letter should not be interpreted
as applying to any matter other than the
Proposed Conduct
as it relates strictly to, or arises directly out of, the COVID-19 pandemic.
This statement
is made in accordance with the Department's Business Review
Procedure, 28 C.F.R.
§ 50.6., and subject to the limitations and reservations of rights
therein. Pursuant to its terms, your business review request and this letter will be made
publicly available immediately, and any supporting data you have submitted will be made
publicly available within thirty days
of the date of this letter, unless you request that part
of the material be withheld in accordance with paragraph 10( c) of the Business Review
Procedure.
Makan Delrahim
49
But see In re Brand Name Prescription Drugs Antitrust Litig., 186 F.3d 781, 789 (7th Cir. 1999)
("[T]he doctrine does not authorize anticompetitive action
in advance of government's adopting the
industry's anticompetitive proposal." (emphasis
in original)); Sandy River Nursing Care v. Aetna
Cas., 985 F.2d 1138, 1142 (1st Cir. 1993) ("[P]rivate actors who
.. . violate the Sherman Act ...
may be held responsible for direct marketplace injury caused ... even if [the defendants'] ultimate
goal
is to obtain favorable state action.").