Allergan, Teva Unit Face FTC Claims Over Generic-Drug Delays

  • Endo settles U.S. antitrust case on generic-drug competition
  • Pay-for-delay deals allowed Endo to keep monopoly profits: FTC

The Federal Trade Commission continued its push against deals that delay the entry of generic drugs, while it settled claims that Endo International Plc broke antitrust laws by entering into agreements with rivals to stave off competition to two of its top-selling medications.

The FTC filed new complaints Monday against Watson Laboratories Inc., its former parent Allergan Plc, and Impax Laboratories Inc. over agreements that kept generic versions of Endo’s drugs off the market. Endo made deals with the companies to delay the release of generic versions of two pain relievers -- Lidoderm and Opana ER -- in order to preserve monopoly profits, the FTC alleged.

“Endo knew that generic competition would decimate its Lidoderm sales and that any delay in generic competition would be highly profitable for Endo, but very costly for consumers,” the FTC said in a complaint filed in federal court in San Francisco.

Ohlhausen Dissent

Endo settled those claims by agreeing not to enter into such deals. It didn’t admit wrongdoing or pay a penalty.

The settlement is “consistent with the company’s position that the Lidoderm and Opana ER settlements fully complied with the law both at the time they were executed and today,” said Matthew Maletta, Endo’s chief legal officer.

The commission voted 2 to 1 to file the complaint against Watson and Allergan, with Commissioner Maureen Ohlhausen, a Republican, dissenting. The vote marks at least the second time in a week that Ohlhausen has dissented in an enforcement action brought by her two fellow commissioners, both Democrats. She opposed a complaint filed Jan. 17 against Qualcomm Inc. that accused the chipmaker of illegally maintaining a monopoly.

Teva Pharmaceutical Industries Ltd. became the parent company of Watson in August 2016, after acquiring the unit from Allergan. Representatives for Allergan and Teva declined to comment. Representatives for Impax didn’t immediately respond to requests for comment.

Opportunity Denied

Teva shares fell 1.6 percent to close at $32.71 and Endo shares fell 1.4 percent to $12.17. Allergan shares rose less than one percent to $214.82.

The complaints against Watson, Allergan and Impax revive claims filed by FTC in March in federal court in Philadelphia. The agency said that in 2012, Endo agreed to pay Watson, which was the first to seek regulatory approval for a generic Lidoderm patch, to hold off on entering the market for more than a year. Endo’s payment to Watson was worth at least $250 million, according to the FTC.

“Patients were denied the opportunity to purchase lower-cost generic versions of Lidoderm, forcing them and other purchasers to pay hundreds of millions of dollars more for this medication,” the agency said.

In the complaint against Impax, the FTC said Impax and Endo illegally agreed in 2010 that Impax would not compete by marketing a generic version of Endo’s Opana ER until January 2013. In exchange, Endo paid Impax more than $112 million, according to the agency.

Lidoderm is a patch used to relieve pain related to shingles. Opana ER is an extended-release opioid.

— With assistance by Caroline Chen, and Jared S Hopkins

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