FTC Sues Drug Companies for Violating Antitrust Laws by Delaying Generics
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FTC Sues Drug Companies for Violating Antitrust Laws by Delaying Generics

April 1, 2016

The Federal Trade Commission (FTC) is suing Endo Pharmaceuticals and several other drug companies for violating antitrust laws to block access to lower cost generic versions of two brand-name drugs.

The complaint claims that Endo paid Impax Laboratories and Watson Laboratories to delay releasing their own generic versions of the opioid painkiller Opana and the topical pain patch Lidoderm.

When a drug patent is coming to an end, federal law allows the first company that files to release a generic version 180 days of exclusivity. After that time, other companies can file to make their own. The original owner of the patent, however, can release a generic anytime it wants, even during that 180 day period.

In 2010, Endo and Impax illegally agreed that until January 2013, Endo would not release its own generic. Endo paid Impax more than $112 million, including $10 million under a development and co-promotion agreement. When Impax released its generic, Endo had already started transitioning patients to a new formylation of Opana, maintaining its monopoly.

Endo also made a similar agreement with Watson Laboratories. In exchange, Endo paid Watson hundreds of millions of dollars, including $96 million of free branded Lidoderm product that Endo and its partner, Teikoku, gave to Watson. As a result, Endo illegally maintained its monopoly over Lidoderm. The companies also agreed that for about for about eight months, Endo would not compete by marketing its own generic, leaving Watson as the only generic version on the market. As a result, Watson made hundreds of millions of dollars more in generic Lidoderm sales.

The FTC is seeking a court judgment declaring that the defendants' conduct violates the antitrust laws, ordering the companies to disgorge their ill-gotten gains, and permanently barring them from engaging in similar anticompetitive behavior in the future.