FTC sues Endo over ‘pay-for-delay’ settlements

The Federal Trade Commission (FTC) has sued Endo Pharmaceuticals for allegedly violating competition laws by agreeing to so-called pay-for-delay settlements surrounding the launch of generic versions of two drugs.

The complaint centres on generics of Endo’s pain relief drug Opana ER (oxymorphone) and Lidoderm (lidocaine topical), which is used to treat shingles, the FTC said.

In the complaint, filed on March 30, the FTC claimed Endo paid Watson Laboratories and Impax Laboratories to delay the launch of their generics and eliminate the risk of competition.

In 2010, Endo and Impax agreed a deal whereby Impax would not market a generic version of Opana ER until January 2013. In total, Endo paid Impax more than $112 million.

US sales of the drug exceeded $250 million in 2010, the FTC said.

In 2012, Endo and Watson, along with Endo’s partners Teikoku Seiyaku and Teikoku Pharma USA, agreed a deal worth “hundreds of millions of dollars” that ensured Watson would not market a generic version of Lioderm until September 2013.

According to the FTC, Lidoderm’s sales for 2012 approached $1 billion in the US.

The FTC also settled charges against Teikoku Seiyaku and Teikoku Pharma USA. Under the order, the two companies are banned from engaging in certain types of reverse agreement payments for 20 years.

Edith Ramirez, chair of the FTC, said: “Settlements between drug firms that include ‘no-AG commitments’ harm consumers twice—first by delaying the entry of generic drugs and then by preventing additional generic competition in the market following generic entry.”

A spokesperson for Endo said it was disappointed by the FTC’s decision to initiate litigation.

"Endo believes that both settlements were supportive of a competitive environment for a number of reasons, including that they permitted the entry of generic competition to Endo’s branded products well before the relevant patents expired and, therefore, benefitted consumers through increased availability and lower pricing.

"Because the settlements complied with all applicable laws, we believe the FTC’s case is without merit and Endo intends to vigorously defend itself in the litigation,” the spokesperson added.