- The U.S. Federal Trade Commission has sued Endo Pharmaceuticals for allegedly violating anti-trust laws by paying hundreds of millions to delay entry of generic versions of its pain drugs Opana ER and Lidoderm, the regulator said Thursday.
- In so-called pay-for-delay deals, a branded drugmaker usually pays a generic competitor or transfers some other advantage in order to delay a cheaper version of its product from reaching markets.
- The FTC claims Endo paid Impax Laboratories over $112 million as part of a deal to give Endo time to introduce and patent a new form of its painkiller Opana ER. In a second, separate deal, Endo allegedly gave Watson Laboratories, a unit of Allergan, hundreds of millions to protect its Lidoderm patch.
- Endo, however, believes the deals supported competition by allowing generic versions on the market before all of its patents on Opana and Lidoderm expired.
In the case of Impax, the allegations against Endo differ slightly from the typical pay-for-delay deal. The FTC says Endo paid Impax $112 million as part of a deal where Endo committed not to market what is known as an "authorized generic."
In the U.S., the first applicant to market a generic version is granted 180 days of market exclusivity upon approval of its drug by the FDA. A branded drugmaker can market an authorized generic version of its own product at any time. Therefore, a commitment by the branded manufacturer not to issue an authorized generic can be very valuable to that first generic filer. Relatedly, if a branded drugmaker like Endo can secure a fixed date when it knows generic competition will enter the market, it can better plan and strategize to meet that challenge.
The FTC claims Endo and Impax illegally structured a "no-authorized generic commitment" in 2010, which allowed Endo to switch patients to a newly patented form of its painkiller drug Opana ER.
Separately, the FTC also said Endo and affiliated partners paid "hundreds of millions" of dollars to Watson Laboratories in May 2012 to delay entry of Watson's generic version of Lidoderm until September 2013. This gave Endo 7 and 1/2 more months of monopoly over its market.
“Endo believes that both settlements were supportive of a competitive environment for a number of reasons, including that they permitted the entry of generic competition to Endo’s branded pharmaceutical products well before the relevant patents expired and, therefore, benefitted consumers through increased availability and lower pricing," the company said in a statement.
The lawsuit is seeking a disgorgement of earnings related to the deals from the companies, as well as a permanent injunction barring all of the defendants from striking similar deals in the future.
Pay-for-delay deals have become less common recently, falling nearly 50% since 2012, according to the FTC. There were 21 such deals in 2014, down from 40 in 2012.
The complaint was filed in U.S. District Court for the Eastern District of Pennsylvania and can be viewed here.