Endo Settles FTC Suit Over Generic Drug Pacts

SAN FRANCISCO (CN) – To settle antitrust claims with the Federal Trade Commission, Endo Pharmaceuticals on Monday agreed to submit to an injunction barring it from striking anti-competitive pacts with generic drug makers.

The FTC sued Endo, Watson Pharmaceuticals and Watson’s former parent Allergan in the Northern District of California Monday, claiming the companies struck an anti-competitive deal aimed at keeping generic forms of Endo’s lucrative pain patch Lidoderm off the market.

In 2011, Endo earned more than $825 million off of Lidoderm, “its most important branded prescription drug product,” according to the FTC. The FTC added that sales of the patch, used to treat pain caused by shingles, made up 30 percent of Endo’s revenue that year.

Watson planned to launch a generic version of Lidoderm by mid-2012. It had challenged Endo’s Lidoderm patent as invalid in court and filed an application to market a generic patch with the U.S. Food and Drug Administration.

“Faced with Watson’s threat to its lucrative Lidoderm franchise, Endo bought off its potential competitor,” the FTC asserted in its 27-page complaint.

Endo allegedly struck a deal with Watson in May 2012, getting its competitor to abandon the patent challenge and to delay introducing a lower-cost generic form of Lidoderm for more than a year, until September 2013.

In exchange for delaying its entry into the market, Endo guaranteed Watson would be the only seller of generic Lidoderm for at least 180 days, the FTC claimed. Endo pledged not to sell its own generic version of Lidoderm for 7.5 months and to provide Watson with branded Lidoderm patches worth up to $240 million “at no cost,” according to the FTC.

“As a result, 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 FTC said in its complaint.

The FTC also filed an administrative complaint against Impax Laboratories on Jan. 19, claiming it also struck an anti-competitive pact with Endo in 2010 to keep a generic form of Endo’s Opana ER off the market until January 2013. In exchange, Impax received $112 million. Opana ER is an opioid used to treat severe pain.

In a stipulated order filed with the court on Monday, Endo agreed to be bound by an injunction that bars it from striking any “no authorized generic” agreements or making payments to generic drug makers aimed at keeping generic versions of drugs off the market.

In a prepared statement, Endo’s executive vice president and chief legal officer Matthew J. Maletta described the FTC settlement as “consistent” with the company’s position that it never violated antitrust laws.

“Endo is extremely pleased with the FTC settlement,” he said. “We believe the absence from the stipulated order of any requirement that Endo make payment to the FTC, as well as the absence of any admissions of liability by Endo, are 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.”

FTC spokeswoman Betsy Lordan declined to comment on Endo’s claim that it did not violate antitrust laws and is not liable for any wrongdoing.