US FTC ‘hampered’ by Boehringer Ingelheim's delay tactics

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The US Federal Trade Commission (FTC), which is investigating patent settlements between Boehringer Ingelheim and Barr (now part of Teva Pharmaceutical Industries) on Aggrenox (aspirin plus extended-release dipyridamole) and Mirapex (pramipexole), has asked for a court order requiring Boehringer to fully comply with a subpoena issued nine months ago for documents and data.

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According to a petition filed on 23 October 2009 in the US District Court for the District of Columbia, the FTC claims that delaying tactics have hampered its ability to assess the legality of the settlements. The subpoena arose during a non-public investigation, it said.

The investigation is part of the FTC's ongoing effort probing ‘reverse payment’ patent settlements that may delay generic drug entry.

“When companies fail to respond promptly and completely to agency subpoenas, we will not hesitate to go to court to seek enforcement,” said the FTC general counsel Willard Tom. “Boehringer's actions in responding to the subpoena at issue fall far short of what is acceptable.” The FTC said that its failure to obtain a time commitment from Boehringer on its full compliance necessitated the filing of the action.

In a memorandum in support of its petition, the FTC stated: “Nearly nine months after the subpoena was issued, and four months after the expiration of the last extension of production deadline granted to it by the commission, Boehringer has yet to comply in full with the commission's subpoena – with its counsel suggesting recently that the process could go on indefinitely. Boehringer has employed a number of tactics that not only have delayed the commission's investigation, but also resulted in the commission not receiving all of the documents and data sought by the subpoena.” Boehringer should now be required to show cause why it should not fully comply, the FTC said. The commission has accused Boehringer of inappropriate redaction, inadequate document collection procedures, and failure to certify compliance.

As background, the FTC said in the memorandum that Barr developed generic versions of both Aggrenox and Mirapex and then filed Abbbreviated New Drug Applications with Paragraph IV (180-day marketing exclusivity) certifications. In response, Boehringer filed two patent infringement suits. The court in the Mirapex patent litigation held that Boehringer's patent was invalid due to double patenting. At the time of the Mirapex patent invalidity ruling, the Aggrenox patent litigation was in its early stages.

In August 2008, Boehringer and Barr entered into a series of settlement and related agreements covering both the Aggrenox and Mirapex litigations. Barr agreed not to compete with Boehringer by forgoing market entry with its generic versions of Aggrenox and Mirapex until 2015 and 2010, respectively. The FTC noted, “At the same time, Boehringer partnered with Barr to co-promote Aggrenox to women's healthcare professionals. Under that arrangement, Boehringer agreed to provide Barr with substantial compensation, including royalties based on net sales of Aggrenox. As required by statute, Boehringer and Barr filed these agreements with the FTC and the US Department of Justice for review”.

In its memorandum, the FTC stated that, in an investigation such as the one at issue, it does not seek the information necessary to prove any specific charges; it merely seeks to learn if the law is being violated and whether to file a complaint.

The FTC stated that the subpoena seeks, for example, documents relating to the patent litigation; documents regarding Boehringer's sales, profits, and marketing plans for Aggrenox and Mirapex; documents relating to all the agreements that Boehringer entered into with Barr at the time of the settlement of their patent litigations; documents relating to Boehringer's co-marketing of products (including Aggrenox) with other firms, including Barr; documents relating to plans or agreements for the marketing of ‘authorised’ generic versions of Aggrenox and Mirapex; and analysts reports relating to the two products.

According to the FTC, Boehringer has not sought to limit the scope of the information requested by the subpoena's specifications.

Aggrenox had US sales of US$366 million (Euros 24 million) in 2008, while Mirapex had sales of about US$477 million (Euros 318.12 million) in 2008, the FTC said.

Separately, the FTC said that the US Circuit Court for the District of Columbia has affirmed a district court decision enforcing three subpoenas to videotape testimony as part of the commission's investigation of patent settlements over the testosterone supplement Androgel.

During the FTC's investigation of the patent settlements (involving Solvay and Watson Pharmaceuticals and Par/Paddock), three subpoena recipients, Scott Tarriff, Edward Maloney and Paul Campanelli, all current or former officers of Par and Paddock, refused to testify at investigational hearings because the subpoenas provided that their testimony would be recorded by videotape, as well as by stenography. After the FTC denied their petition to limit or quash the subpoenas, the three witnesses still refused to testify. The agency then sought a court order in June 2008 requiring the videotaping. Nonetheless, the three witnesses appealed against the district court's decision. On 23 October 2009, the appellate court ruled in the FTC's favour.

The FTC has had a difficult time challenging ‘reverse payment’ patent settlements, but it has continued to file lawsuits. The chairman of the FTC says eliminating them could save US consumers US$3.5 billion (Euros 2.33 billion) a year.

In late July 2009, Solvay and Watson jointly fielded a motion seeking dismissal of the FTC's lawsuit on 29 January 2009 alleging the patent settlements restrained competition. They argued the settlements are legal under an appeals court's precedent.

References:
US FTC “hampered” by Boehringer Ingelheim's delay tactics. Scrip News. 2009 Oct 29.
“U.S. Court of Appeals Enforces Subpoenas in FTC’s Androgel Investigation; In Separate Case, FTC Files Petition to Compel Enforcement of Subpoena Issued to Boehringer Ingelheim”. FTC Press Release. 2009 Oct 27.

Source: Scrip News, FTC Press Release

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