The Federal Trade Commission (FTC) has made its first outright challenge towards so-called “no-authorized-generics” agreements between branded drug makers and generic drug companies. The agency initiated legal action against Endo Pharmaceuticals Inc. and other drugmakers for making anti-competitive payments through the mechanism of illegally withholding authorization for the production of generic versions of certain drugs. The FTC concludes these pharmaceutical companies violated antitrust laws by blocking lower-cost generic versions of branded drugs from consumers with pay-for-delay payments.
According to FTC Chairwoman Edith Ramirez, “Settlements between drug firms that include ‘no-AG [no-authorized-generic-version] 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. This lawsuit reflects the FTC’s commitment to stopping pay-for-delay agreements that inflate the prices of prescription drugs and harm competition, regardless of the form they take.”
Speaking with Law360 (subscription) about the case, Lieff Cabraser partner Dean M. Harvey noted, “The FTC is a major thought leader in this area, so in challenging this form of pay-for-delay, I anticipate that it will have a positive effect on antitrust enforcement and on the ability of civil plaintiffs to challenge these kinds of agreements successfully.”
The FTC’s complaint alleges that Endo partnered with generic drug companies Impax Laboratories and Watson Laboratories, subsidizing them to deter the risk of competition with their branded opioid drug Opana ER and pain relief Lidoderm, in violation of the Federal Trade Commission Act. The case is Federal Trade Commission v. Endo Pharmaceuticals Inc. et al., case number 2:16-cv-01440, in the U.S. District Court for the Eastern District of Pennsylvania.
About Dean Harvey
A partner in Lieff Cabraser’s San Francisco office, Mr. Harvey represents individuals and companies in antitrust, business tort, employment, and intellectual property litigation. His cases seek to remedy and prevent wrongful conduct by dominant firms. These precedent-setting lawsuits concern a wide variety of industries and markets. Remedies include reimbursing purchasers who have overpaid for price-fixed products; preventing monopolists from stifling innovation and eliminating competition; and obtaining damages for businesses, inventors, and copyright owners.
Mr. Harvey was a leader in the High-Tech Antitrust class action against Google, Apple, Intel and other tech giants for allegedly conspiring to suppress the mobility and compensation of their technical employees. This landmark case resulted in the largest recovery (by far) of any class action asserting antitrust claims in the employment context: $435 million. Mr. Harvey continues the fight to ensure that employees receive competitive compensation, currently representing a doctor in a class action alleging an unlawful no-hire agreement between the medical schools of Duke University and the University of North Carolina.