Wed, Jan 25, 2017 page10

• Allergan, Teva unit face FTC scrutiny of deals

  COMPETITION CONCERN: The US agency said Endo was aware that competition would hit sales of Lidoderm and that any delay to entry of competitors would help

  • Bloomberg
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  The US Federal Trade Commission (FTC) 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 commission on Monday filed new complaints 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 — to preserve monopoly profits, the commission 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 commission said in a complaint filed in US federal court in San Francisco.

  Endo settled those claims by agreeing not to enter into such deals. It did not 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,” Endo chief legal officer Matthew Maletta said.

  The FTC voted two to one to file the complaint against Watson and Allergan, with commissioner Maureen Ohlhausen 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.

  She opposed a complaint filed on Tuesday last week against Qualcomm Inc that accused the chipmaker of illegally maintaining a monopoly.

  Teva Pharmaceutical Industries Ltd became the parent company of Watson in August last year after acquiring the unit from Allergan.

  Representatives for Allergan and Teva declined to comment.

  Representatives for Impax did not immediately respond to requests for comment.

  Teva shares on Monday fell 1.6 percent to close at US$32.71, while Endo shares fell 1.4 percent to US$12.17. Allergan shares rose less than 1 percent to US$214.82.

  The complaints against Watson, Allergan and Impax revive claims filed by the commission 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 US$250 million, the commission said.

  “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,” it said.

  In the complaint against Impax, the commission said that 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 US$112 million, it said.

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