FTC sues Endo, others on pay-for-delay allegations

WASHINGTON — The Federal Trade Commission announced Thursday that it had filed a complaint against Endo Pharmaceuticals and several other drug companies alleging that it violated antitrust laws by paying settlements to drug makers to delay the introduction of generic versions of Opana ER and Lidoderm. 

 

The FTC said this is the first case that’s challenged an agreement to not market an authorized generic of a particular drug, which it calls no-AG commitments. 

 

“Settlements between drug firms that include ‘no-AG commitments’ harm consumers twice — first by delaying the entry of generic drugs and then by preventing additional generic competition in the market following generic entry,” FTC chairwoman Edith Ramirez said. “This lawsuit reflects the FTC’s commitment to stopping pay-for-delay agreements that inflate the prices of prescription drugs and harm competition, regardless of the form they take.”

 

The complaint alleges that Endo paid Impax Laboratories and Watson Laboratories, which were the first companies to file for FDA approval for generics of Endo’s Opana ER and Lidoderm — actions that violate the Federal Trade Commission Act. It charges that Endo in 2010 agreed not to market a generic of Opana ER (which the branded drugmaker is allowed to do at any time) until 2013, paid $112 million to Impax and moved patients over to a new Opana ER formulation, which the FTC said kept “its monopoly power even after Impax’s generic entry.”

 

Additionally, the FTC contends that in May 2012, Endo paid Watson hundreds of millions of dollars — including $96 million worth of free branded Lidoderm patches — in order to keep Watson from competing with Endo and partner companies Teikoku Seiyaku and Teikoku Pharma. The complaint also alleges that Endo and Watson agreed that Endo wouldn’t introduce its generic version of Lidoderm for about seven months after September 2013. This move, according to the FTC, “ left Watson as the only generic version of Lidoderm on the market, substantially reducing competition and increasing prices for generic lidocaine patches.”

 

The complaint also names Endo parent company Endo International and Watson parent company Allergan. Alongside the complaint, the FTC also filed a stipulated order of permanent injunction against Teikoku Seiyaki and Teikoku Pharma, preventing them for 20 years from engaging in some types of reverse-payment agreements, including no-AG commitments. It does not restrict settlement agreements whose value are unlikely to present antitrust concerns. 

 

The FTC voted 3-to-1 to file the complaint, with commissioner Maureen Ohlhausen voting no, suggesting that administrative measures would be a better course, noting, “I have reason to believe that the Defendants violated Section 5 of the FTC Act by entering into pay for delay agreements. I do not believe, however, that it serves the public interest to seek disgorgement in this case.”