It’s a lucrative thought to a drugmaker with branded drugs and patent-based revenues: Pay off encroaching generic competitors to delay their products from hitting the market. But turns out, this can get sued.
The Federal Trade Commission has sued Endo Pharmaceuticals and several other drugmakers, saying they’ve entered “pay-for-delay” deals that postpone generic versions of its drugs to hit the market.
The FTC says such patent settlements are a violation of antitrust laws, because they block consumers’ access to lower-cost versions of pain relief drugs Opana ER and Lidoderm.
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These kinds of settlements “harm consumers twice,” FTC Chairwoman Edith Ramirez said in a statement. Not only does it take longer for patients to receive more cost-effective therapies, but it prevents generic competition in the market.
The FTC wagers that Endo actually brokered deals with the first generic companies that filed for FDA approval to develop drugs that compete against Opana ER and Lidoderm.
This first came to light in 2014 with a Bloomberg piece that cited a construction workers’ health and welfare fund accusing Endo of having “literally bought itself freedom from generic competition.” Of course, in 2013 the FDA nixed Endo’s petition to protect Opana ER from competitive generics – so this has been in contention for some time now.
Pay-for-delay plays are highly common, and listed on the FTC’s website. Other companies that have run into these issues are Amicus, Cephalon and Sanofi-Aventis.
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The FTC complaint finds that between 2010 and 2013, Endo paid $112 million to Impax Laboratories to keep its generic of the popular Opana ER off the market. In that time, Endo was able to reformulate the drug to create a new formulation of Opana ER, “maintaining its monopoly power” even after Impax’s generic entered the market. In 2010, Opana ER revenues were $250 million.
It behaved similarly in May 2012, when it paid Watson Laboratories “hundreds of millions of dollars” so that until September 2013 Watson wouldn’t market a generic version of Endo’s Lidoderm patch. Given that Endo’s Lidoderm revenues were nearly $1 billion in 2012, this move helped Endo extend its monopoly in that space. It also brokered a deal with Watson that made it the only authorized generic on the market – so Watson, in turn, made “hundreds of millions more in generic Lidoderm sales.”
[Image courtesy of Endo Pharmaceuticals]
