In May 2015, the FTC settled a “pay-for-delay” suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations. In August 2016, forty-eight states filed suit in the Eastern District of Pennsylvania against Cephalon alleging anticompetitive conduct by Cephalon to protect the profits it earned from having a patent-protected monopoly on the sale of its landmark drug, Provigil. According to the complaint, Cephalon’s conduct delayed generic versions of Provigil from entering the market for several years. The complaint alleged that as patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable. Before it was declared invalid, Cephalon was able to use the patent to delay generic competition for nearly six additional years by filing patent infringement lawsuits. Cephalon settled those lawsuits by paying competitors to delay sale of their generic versions of Provigil until at least April 2012. Consumers, states, and others paid millions more for Provigil than they would have had generic versions of the drug launched by early 2006, as expected. A settlement was filed with the complaint, which includes $35 million for distribution to consumers who bought Provigil.
People of the State of New York v. Actavis, PLC et al., No. 14-CV-7473 (RWS)(S.D.N.Y filed Dec. 10, 2014)
Plaintiff state sued pharmaceutical manufacturer Actavis plc and its New-York based subsidiary Forest Laboratories seeking an injunction to prevent them from withdrawing the Alzheimer’s drug Namenda from the market and switching patients to a once daily version, Namenda XR. Namenda’s patent will expire in July 2015 and the company thereafter faces competition from generic drug makers. According to the complaint, Actavis planned to force patients to switch unnecessarily to Namenda XR because it had a longer patent. Once patients switch to Namenda XR, it would be difficult for patients to switch drugs again once generics become available. Normally, state substitution laws allow pharmacists to dispense generics without being forced to obtain physician approval. According to the complaint, even though Namenda and Namenda XR have the same active ingredient, pharmacists will not be allowed to offer generic Namenda to patients taking Namenda XR; a doctor’s approval would be required to make that switch. This means that most Alzheimer’s patients and their families will remain on Namenda XR. The lawsuit alleges that, by forcing patients to switch to Namenda XR, Actavis is gaming the regulatory system that governs pharmaceuticals and violating antitrust laws designed to encourage competition and keep prices down for consumers. In December 2014, the district court enjoined Actavis from ceasing production of Namenda, and the injunction was affirmed by the Second Circuit in May 2015.
The FTC and states alleged that the companies had entered into a “pay-for-delay” arrangement, whereby Perrigo paid Alpharma to withdraw its generic version from the market for Children’t ibuprofen.According to the complaint, in June 1998, Perrigo and Alpharma signed an agreement allocating to Perrigo the sale of OTC children’s liquid ibuprofen for seven years. In exchange for agreeing not to compete, Alpharma received an up-front payment and a royalty on Perrigo’s sales of children’s liquid ibuprofen. The FTC received $6.25 million to compensate injured consumers. The states received $1.5 million in lieu of civil penalties. the parties were enjoined from future agreements.
Investigation Concerning an Agreement Between Competing Pharmaceutical companies to Not challenge Each Other’s sole first to file Exculsivity, Assurance No. 14-034 (Feb. 19, 2014)
State challenged an agreement between two generic pharmaceutical makers under which they agreed not to challenge the exclusivity of any of the other party’s pharmaceuticals (pursuant to the Hatch-Waxman Act). The parties agreed to drop that provision and not enter into a similar provision with other generic manufacturers
33 states investigated “pay for delay” allegations relating to DDAVP, a drug used to alleviate bed-wetting. States alleged that Aventis, holder of the patent for the medication, engaged in a scheme to delay the regulatory approval and sale of a generic version of DDAVP, in violation of state and federal antitrust law. States and defendants entered into a settlement under which states received $3.45 million, not as a civil penalty and defendants did not admit guilt.
Attorney General of Florida v. ASAP Meds No. 04-16032 (09) (Fl. Cir. Ct., Broward Cty. Oct. 27 2004)
State brought price-gouging action against distributor of flu vaccine during a flu vaccine shortage. The distributor’s prices were allegedly 1000 percent of the actual price of the vaccine. Defendant agreed to consent order enjoining it from sales of the vaccine and turned its supply of vaccine over to the Florida Department of Health. Several months later, the state and the defendant entered into a settlement under which the defendant agreed to refrain from intentionally making false statements to consumers relating to how much of a given drug is in stock, how quickly it is being sold and how long the current supply will last. In addition, the company paid $150,000 for a training and educational program for at-risk youth and $71,000 to be used to assist pharmacies that were affected by Meds-Stat’s activities.
Plaintiff state sued Flrida vaccine firm , Meds-Stat,alleging the company planned to sell flu vaccine at prices almost 1,000 percent higher than the original list prices in the wake of the U.S. flu vaccine shortage.
The settlement required Meds-Stat to affirm the company sold no vaccine in the state at exorbitant prices, reimburse the state for costs of the investigation as well as legal fees and expenses, and assist the state in identifying problems in the vaccine distribution network to prevent future price gouging.
Plaintiff states settled with drug maker Organon USA, Inc. and its parent company, Akzo Nobel N.V., resolving antitrust claims involving the antidepressant drug Remeron between June 2001 and October 2004. The states’ complaint alleged that Organon unlawfully extended its monopoly by improperly listing a new “combination therapy” patent with the U.S. Federal Drug Administration. In addition, the complaint alleged that Organon delayed listing the patent with the FDA in another effort to delay the availability of lower-cost generic substitutes. The $26 million settlement resolved claims brought by state attorneys general, as well as a private class action brought on behalf of a class of end payors. Organon also agreed to make timely listings of patents and to submit accurate and truthful information to the FDA.
State parens patriae action, wholly under state law, alleging anticompetitive tying and pricing. The tying product was White Blood Cell Growth Factor, in which Amgen had a monopoly position, according to the complaint. The tied product was Red Blood Cell Growth Factor. Amgen’s product, Aranesp, competed with Procrit for this market. The complaint alleged that oncology clinics, which use these drugs, receive rebates on WBCGF purchases if they purchase above a certain amount of the RBCGF from Amgen. The case was removed to federal court, and the state filed a motion to remand, but the newly-elected Attorney General dismissed the case without prejudice before the motion was heard.
Plaintiff State and the FTC challenged so-called “reverse payment” agreement between Solvay Pharmaceuticals (patent holder) and Watson Pharmaceuticals, Par Pharmaceuticals and Paddock Laboratories that delayed the entry of a generic substitute for Androgel, a testosterone-replacement drug. State and the FTC alleged that Solvay, fearing the entry of lower-cost generic substitutes for Androgel, resolved patent litigation with the other three companies by making substantial payments to them, on the condition that they not enter the market with their generic version. the parties seek injunctive relief and fines of $2500 per violation under California antitrust law. Case was transferred to district court in Georgia and state did not re-file in Georgia, although the FTC did.