Endo Pharmaceuticals, others named in antitrust suit over Lidoderm topical patch

By Jon Campisi | Nov 14, 2013

Endo Pharmaceuticals is accused in a newly filed civil action of violating

Endo Pharmaceuticals is accused in a newly filed civil action of violating

federal antitrust laws for allegedly excluding generic competition from the market for a lidocaine topical patch that goes by the brand name Lidoderm.

Drogueria Betances Inc., a corporation based in Puerto Rico, filed a class action suit on Nov. 8 on behalf of itself and others who purchased Lidoderm directly from Endo and the other defendants in the case, who are Teikoku Pharma USA Inc., Teikoku Seiyaku Co. LTD. Actavis Inc., Watson Pharmaceuticals Inc., Watson Laboratories Inc., Anda Inc., Anda Pharmaceuticals Inc., and Valmed Pharmacetucals Inc.

The lawsuit says that since Lidoderm’s approval in 1999, Endo has been able to charge monopoly prices, and earn monopoly profits, on Lidoderm.

By 2012, Lidoderm had annual sales in the United States of about $1.3 billion.

Endo, however, feared that its monopoly prices and profits would quickly come to an end once a more lower-priced generic version of the pain patch entered the market, the complaint alleges, so the defendant acted to ensure it could keep a monopoly hold over the pharmaceutical product.

Defendant Actavis was the first to seek approval from the Food and Drug Administration to launch a generic equivalent to Lidoderm, a move that threatened Endo’s Lidoderm monopoly profits, the suit states.

Endo soon filed suit, alleging that Actavis infringed on the company’s patent.

Endo and Actavis ultimately entered into an agreement to forego competition between them for a period of time whereby, among other things, Actavis agreed to delay entering the market with its generic equivalent of Lidoderm until mid September of this year, the current complaint notes.

Endo also agreed to provide, for free, at least $96 million worth of branded Lidoderm product, and potentially up to $240 million worth of free product, which would be delivered to one of three named Actavis wholly-owned subsidiaries who could sell the branded product at supra-competitive prices, the lawsuit states.

“This was the functional equivalent of Endo and Actavis unlawfully sharing monopoly profits because Endo gave Actavis a share of the monopoly product volume to sell at monopoly prices, which it did,” the complaint reads.

In return for Actavis agreeing to keep its generic version of Lidoderm off the market, Endo also agreed not to launch an authorized generic version of Lidoderm to compete with Actavis’ generic equivalent version once it was launched in September 2013, the suit states.

The plaintiff claims that earlier generic launches of the lidocaine patch would have resulted in direct purchasers of the product paying substantially less for their patch purchases than they actually ended up paying.

“Defendants have shared in the illegal profits reaped from this scheme,” the lawsuit states. “Because generic versions of brand-name drugs are typically much less expensive than their brand-name counterparts, and because purchasers typically switch rapidly from a brand to a generic once the generic becomes available, wrongful suppression of generic competition, as occurred here, results in enormous overcharge damages to all purchasers of the drug at issue.”

The defendants’ agreement, the suit says, was intended to, and did, in fact, preclude entry into the market of less expensive generic versions of lidocaine patches; fix, raise, maintain or stabilize the prices of lidocaine patch products at supra-competitive levels; permit Endo to monopolize the market for lidocaine patches; and allocate 100 percent of the lidocaine patch market in the territory to Endo.

The defendants are accused of violating The Sherman Act.

In addition to declaratory judgment, the plaintiff, on behalf of itself and others similarly situated, seeks an unspecified number of monetary damages, attorney’s fees and costs.

The complaint also seeks to have any and all patents held by Endo with regard to Lidoderm be declared null and void and have no further effect.

The lead plaintiffs’ attorneys in the case are Howard J. Sedran and Keith J. Verrier of the Philadelphia firm Levin, Fishbein, Sedran & Berman.

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