Jonathan Silverberg

PHILADELPHIA - The Federal Trade Commission (FTC) thinks Endo Pharmaceuticals and other drug companies are violating antitrust laws when they pay other companies to delay bringing generic versions of their products to market.

These pay-for-delay agreements are the target of a recent FTC complaint filed in federal district court. It is the culmination of a decade of FTC attempts to eliminate the practice of reverse payments that have become common in the pharmaceutical industry.

“Following the Supreme Court’s 2013 decision in FTC v. Actavis, we identified certain patent settlement agreements that appeared to raise competitive concerns, including Endo’s reverse payment agreements concerning Opana ER and Lidoderm,” FTC spokeswoman Betsy Lordan told the Pennsylvania Record.

“Following the investigation, the Commission decided to file this suit.”

At issue in this case is the concept of patent protection. A drug manufacturer that brings a new product to market enjoys 20 years from the date of first patent filing to exclusively manufacture, market and ultimately profit from the drug.

Considering the time it takes to gain Federal Drug Administration (FDA) approval, the effective window a drug designing company has to maintain exclusive control is usually 7-12 years.

Enter the pay-for-delay concept that allows companies like Endo to pay generic drug manufacturers to delay bringing their versions of name brand drugs to market.

The FTC alleges that Endo paid up to $40 million to Impax to keep a generic version of Opana ER off the market for two years.

With the publicity surrounding this FTC filing, was it the Commission’s intent to fire a warning shot for all of the pharmaceutical industry to hear? Not exactly.

“We expect that we already have the pharmaceutical industry’s attention,” Lordan said. “The Commission has been active in challenging reverse-payment agreements for 15 years.”

Another version of the deal is referred to as the No-AG (authorized generic) agreement. The first filer after a drug patent expires is granted by federal law a 180-day window in which to (almost) exclusively market a generic. Almost, because the drug designer and initial patent holder may also sell its own generic version of the drug.

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