Drug Firms Not Entitled to Info on Other Disputes

ATLANTA (CN) - Pharma companies in a multimillion-dollar settlement related to a popular testoterone replacement drug are not entitled to non-public information concerning similar disputes between brand-name and generic-drug distributors, a federal judge ruled.

Belgian pharmaceutical company Besins Healthcare developed AndroGel in the 1990s. Solvay Pharmaceuticals licensed the U.S. rights to the AndroGel formula and applied for a U.S. patent for the drug, which it obtained in January 2003.

That same year, Watson Pharmaceuticals (now Actavis) and Paddock Laboratories filed applications with the Food and Drug Administration for generic versions of AndroGel. Paddock reached an agreement with Par Pharmaceuticals to share potential patent-litigation costs, as well as profits from sales of generic AndroGel.

Solvay and Besins sued the three generic-drug distributors in August 2003 for patent infringement, preventing the generics from entering the market for 30 months. Watson continued, however, its efforts to develop generic AndroGel, and received final FDA approval for the drug in 2006.

The parties settled the patent infringement lawsuit before the court could rule on the merits, postponing the market entry of generic AndroGel until August 2015.

According to the settlements, Watson would receive between $15 million and $30 million a year for promoting AndroGel and for delaying the launch date of its generic drug. Solvay said it would also pay Par about $10 million a year for co-promoting AndroGel. Paddock would serve as a backup manufacturer for AndroGel and receive $2 million annually.

The settlement agreements prompted an investigation by the Federal Trade Commission, which claimed that the "reverse payment settlements" between the drugmakers stifled competition.

The FTC, joined by private parties, sued the drugmakers in 2009, claiming that Solvay used its monopoly profits to buy off its competitors, to the detriment of consumers.

The U.S. District Court in Atlanta found that the settlements were immune from antitrust scrutiny, but reconsidered that decision after the U.S. Supreme Court reversed in 2013, ruling that reverse payment settlements can sometimes violate antitrust laws.

During discovery in the ongoing litigation, the drugmakers asked to see several studies and underlying data on which the FTC planned to rely in the litigation. The FTC conducted studies concerning patent lawsuits and settlements involving brand-name and generic drugmakers, some of which were mentioned in the FTC's amended complaint.

The studies would show that generic drugs prevailed in the majority of such cases litigated on the merits, and that reverse payment settlements are not the norm in pharmaceutical patent litigation, according to the complaint.

Although the FTC provided the defendants with a list of 27 studies, it withheld non-public information underlying the research.

The pharmaceutical companies argued they had a right to see that data as well. Although the FTC allegedly tried to downplay the role the studies and related data would play in the litigation, the drugmakers claimed they needed access to the data to test and rebut the Commission's evidence.

However, the defendants failed to establish that the information underlying the studies is relevant to the specific claims in this lawsuit, U.S. District Judge Thomas Thrash said last week.

The information the drugmakers seek is related to other lawsuits and settlement agreements between other parties, the May 11 ruling states.

Moreover, in intervening in a separate lawsuit in Pennsylvania, the defendants argued the opposite - that confidential information that is not directly related to the claims should not be disclosed, the judge noted.

And although some of the studies are cited in the FTC's complaint, they simply provide background information about the success rate of challenges brought by generic manufacturers against brand-name patents, the court said.

The fact that the FTC's experts may rely on some of those studies in performing their analysis does not make them relevant to the specific claims at issue, the opinion adds.

Additionally, the FTC would face a significant burden if forced to comply with the defendants' discovery request, Thrash concluded. The Commission would have to redact a large number of documents to protect non-public information used in hundreds of other settlements, according to the opinion.

"At this point, it is unclear whether the FTC's experts will use the studies, and even more unclear how they would use them," Thrash wrote. "The court is reluctant to place a significant burden on the FTC in order to ensure the production of information whose relevance to this litigation is questionable, at best."

An attorney who represents Paddock and Par Pharmaceuticals declined to comment on the decision.

Representatives for Actavis and the FTC did not respond to requests for comment.

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