FTC Bars Endo from Future Pay-for-Delay Agreements

On Jan. 23, 2016, the Federal Trade Commission (FTC) announced it had reached an arrangement with Endo to resolve the FTC’s complaint that Endo entered into reverse-payments settlements for Lidoderm and Opana ER that eliminated generic competition. Under terms of the agreement, Endo will be prohibited from entering into future reverse-payment agreements, and FTC will release the company from liability surrounding these agreements for the branded drug AndroGel (testosterone gel), which is made by AbbVie.

The refiled complaint, which was originally issued in March 2016 but dismissed in November 2016, names Allergan, Watson, and Endo as defendants. It challenges the agreements between Watson and Endo for the lidocaine patch Lidoderm, wherein Endo "bought off" Watson and Watson agreed to abandon the patent challenge. In the agreement, Endo agreed to hold their generic version of Lidoderm off the market and allow Watson to market its version for up to 7.5 months. Endo also agreed to provide Watson with samples of Lidoderm for free, which Watson could sell at profit through its distribution arm, Anda.

FTC said in its complaint that because Lidoderm was such a unique product, other branded products to relieve pain that were similar (such as Qutenza, Horizant, and Gralise), “had no discernible impact on Lidoderm prices or unit sales.” As a result of Watson and Endo’s deal, by 2014, Endo had captured more than 40% of the lidocaine patch market.

The agency wrote the pay-for-delay agreement hurt consumers and harmed competition, namely because Watson could have had its generic enter the market prior to September 2013, but “abandoned” its plan to enter the market before this time because it received a payment from Endo and free product to sell.

FTC filed a related complaint against Impax Laboratories as well, claiming it illegally entered into a reverse-payment agreement with Endo for $112 million that kept Impax’s version of Opana ER off the market.

Endo agreed to the terms of the stipulated order for permanent injection, effectively resolving the disputes with FTC on Opana ER and Lidoderm. In a press release, Endo also said that the agreement resolves the FTC’s claims against Endo subsidiary Par Pharmaceuticals in the action FTC v. Actavis.

Source: FTC, Endo