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Feds Win Document Fight in Pay-for-Delay Case

WASHINGTON (CN) — A federal judge ruled the Federal Trade Commission is entitled to some documents it subpoenaed during an investigation of a pay-for-delay settlement involving prescription drugs Aggrenox and Mirapex.

The case, involving issues of attorney-client privilege and opinion work product, made headlines when the U.S. Supreme Court declined earlier this year to take up case at the behest of the American Bar Association, which argued that a lower court's decision weakened privileged communications.

The document fight stems from the FTC's 2008 antitrust investigation of a patent litigation settlement agreement between Boehringer Ingelheim Pharmaceuticals and Barr Pharmaceuticals Inc., a subsidiary of Teva Pharmaceutical Industries Ltd.

In 2009, the FTC subpoenaed communications between Boehringer's management and in-house attorney that occurred while the company contemplated a $120 million pay-for-delay, or reverse-payment, settlement of patent litigation over Barr's generic versions of Aggrenox, which is used to reduce the risk of stroke with those suffering blood clots or mini-strokes, and Mirapex, a treatment for Parkinson's disease and restless leg syndrome.

The settlement included payments to Barr for delaying the promotion of its generic forms of the drugs, giving Boehringer a monopoly on profits for a time.

During the government's investigation, Boehringer sought to protect a number of documents that included "financial analyses of a co-promotion agreement between Boehringer and Barr regarding Aggrenox; forecasting analyses of possible timelines for Barr's generic drug to enter the market; financial analyses of the business terms of the settlement agreement; and notes taken by business executives," according to court documents.

The district court initially ruled that the documents were work product because they were "prepared for counsel and were not business forecasts made in the ordinary course of business," but the FTC appealed the decision, arguing it had no other way to obtain the information in the documents.

The agency claimed that Boehringer should not be able to use them "both as a sword (to claim their business deal was a fair transaction) and a shield (using claims of privilege to prevent anyone from looking into the validity of such a claim)," court records show. (Parentheses in original).

The appeals court sided with the FTC and remanded the case to the district court, which reviewed the documents in camera before ordering Boehringer to produce 10 documents it sought to protect, as well as an undetermined number of documents that were not part of the sample submitted to the court.

In a Sept. 27 decision, U.S. Magistrate Judge G. Michael Harvey ordered Boehringer to "produce any previously unproduced documents similar to those identified...for which work-product protection and not attorney-client privilege was claimed."

"Because the Court of Appeals has already concluded that the FTC has shown sufficient need for these documents if they are fact work product, and because there is no alternative assertion of the attorney-client privilege as to these documents, the court will direct Boehringer to produce these documents," Harvey wrote about the 10 specific documents.

The FTC declined to comment on the ruling, and Boehringer did not respond to a request for comment last week.

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