Generics companies defend against illegal ‘pay-for-delay’ charges Posted 20/04/2018

In March 2018, pharmaceutical companies in the US and Europe have had to defend themselves against antitrust charges. Illegal ‘pay-for-delay’ deals enable companies to profit by delaying the release of generic drug products [1]. In recent months, generics manufacturers, Impax Laboratories Inc in the US and Teva Pharmaceutical Industries (Teva) in Europe, have both been accused of entering into such deals with originator companies. In addition, US companies, Endo, Watson, Teikoku are to pay over US$270 million to settle pay-for-delay lawsuits over Endo’s Lidoderm (lidocaine) pain patch.

At the Boston Federal Court in the US, Impax went to trial over allegations that they agreed to delay the launch of a generic version of acne medication Solodyn. Retailers and consumers have accused Impax of delaying the drug release in 2008, in exchange for US$40 million that was paid to the brand-name originator manufacturer, Medicis.

Impax have reached a deal to resolve part of the litigation by agreeing to pay US$35 million on claims made by some direct purchasers. Valeant Pharmaceuticals International Inc, who acquired Medicis in 2012, have also agreed to pay US$58 million to resolve related claims against it. Valeant has been in the spotlight more than once in recent years over predatory pricing policies [2]. An October 2017 court ruling noted that lawyers for the claimants have said that they were overcharged by up to US$790.3 million and that the defendants were unjustly enriched by up to US$803.3 million. Any damages will be tripled under US federal antitrust law.

At a hearing on 13 March 2018 in Europe, Israeli company, Teva, said that it objects to European Commission (EC) antitrust charges made against it in July 2017.

The charges made by the EC’s competition watchdog state that Teva entered into an illegal ‘pay-for-delay’ deal with US biopharmaceutical company Cephalon, which was acquired by Teva in May 2011 [3]. This is thought to have delayed the selling a generic version of the drug Provigil (modafinil) and may have inflated prices of the medication by up to 10%. A final decision has not been made by the EC yet, but it could penalize Teva by up to 10% of their global turnover for breaching EU rules.

Meanwhile, Endo, Watson, Teikoku have been ordered to pay millions to settle lawsuits over the Lidoderm patch. In 2013, Lidoderm manufacturers Endo and Teikoku made a US$266 million deal with Watson Pharmaceuticals to delay the launch of their generic version and drop its patent dispute with the manufacturers. The firms had previously unsuccessfully attempted to have the antitrust litigation shut down [4].

Under the terms of the settlement payments of US$60 million from Endo, US$71 million from Watson, and US$35 million Teikoku will be made to the direct purchasers in the litigation. In addition, in a separate settlement for the end-payer plaintiffs who experienced less financial harm a result of the pay-for-delay deal, Watson will pay US$41 million, Endo US$40 million, and Teikoku US$23 million.  

Related articles
Lawyers look at new price hike for old drug

FDA rejects Endo petition to stop Opana ER generics

Brand-name drug and generics makers fight to save pay-for-delay

Teva again files citizen petition against generic Copaxone

References
1. GaBI Online - Generics and Biosimilars Initiative. US drug contracting system is rigged against biosimilars [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 Apr 20]. Available from: www.gabionline.net/Biosimilars/General/US-drug-contracting-system-is-rigged-against-biosimilars
2. GaBI Online - Generics and Biosimilars Initiative. Hilary Clinton goes after Valeant for predatory pricing [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 Apr 20]. Available from: www.gabionline.net/Generics/General/Hilary-Clinton-goes-after-Valeant-for-predatory-pricing
3. GaBI Online - Generics and Biosimilars Initiative. Teva grabs biopharmaceutical company Cephalon [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 Apr 20]. Available from: www.gabionline.net/Biosimilars/News/Teva-grabs-biopharmaceutical-company-Cephalon
4. GaBI Online - Generics and Biosimilars Initiative. Judge denies attempt to dismiss pay for delay class action [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 Apr 20]. Available from: www.gabionline.net/Pharma-News/Judge-denies-attempt-to-dismiss-pay-for-delay-class-action

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