Judge OK’s Subpoena in|Drug Patent Investigation

(CN) - The president and CEO of Watson Pharmaceuticals must comply with a subpoena from the Federal Trade Commission, which is investigating a settlement the generic drugmaker struck with a brand-name company, a federal judge in Washington, D.C., ruled.

The FTC says it needs to hear testimony from Watson CEO Paul Bisaro as part of its investigation into a 2006 settlement between Cephalon and five generic drugmakers, including Watson, over generic versions of Cephalon's narcolepsy drug, Provigil (modafinil). The agency wanted to determine if Cephalon had taken anticompetitive measures to protect its product after the expiration of its patent.

U.S. District Judge Colleen Kollar-Kotelly rejected Bisaro's argument that the FTC concocted the entire investigation to coerce Watson to relinquish its exclusivity rights and partner with Apotex, which was selling generic modafinil in Canada.

Kollar-Kotelly called the FTC's discussions about Watson partnering with Apotex "inappropriate," but she said that the judge who granted a subpoena to the FTC also permitted "the extraordinary step of allowing limited discovery into the FTC's basis for the investigation."

"The evidence that has been produced by the FTC as a result of that discovery demonstrates that the subpoena was not issued for the reason that respondent believes," according to the ruling.

Kollar-Kotelly wrote that the investigation into Cephalon and Watson was underway long before the FTC began discussions with Apotex, and that Watson has not fully cooperated.

"The record shows, at best, that an FTC official made an inappropriate comment in the context of a lawful investigation," the ruling states.

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