FTC reaches pay-for-delay settlement with Endo

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By Toni Clarke | WASHINGTON

WASHINGTON Endo International Plc said
on Monday it has reached a proposed settlement with U.S.
antitrust regulators under which it will not pay rivals to delay
the introduction of generic competitors to its medications.

The Federal Trade Commission had alleged Endo paid Impax
Laboratories Inc to delay the introduction of a generic
version of its painkiller Opana ER.

The agency also alleged Endo paid Watson Laboratories Inc to
delay introduction of a generic version of its Lidoderm pain
treatment. The proposed settlement must be ratified by a court.

Endo said it is not required to make any monetary payment to
the FTC and made no admission of liability. It said the
settlement is “consistent with the company’s position that the
Lidoderm and Opana ER settlements fully complied with the law
both at the time they were executed and today.”

Watson and Impax were also named in the FTC’s lawsuit, which
alleges the companies illegally blocked access to low-cost
alternatives to Endo’s products. The complaint against those
companies remains outstanding.

Watson, which was formerly owned by Allergan Plc, is
now owned by Teva Pharmaceutical Industries Ltd. Teva
and Allergan declined to comment. A spokesman for Impax was not
immediately reachable.

U.S. Senator Amy Klobuchar, a Democrat, and Republican
Senator Chuck Grassley said in a statement that they have
introduced legislation, “Preserve Access to Affordable Generics
Act,” to crack down on such arrangements.

The FTC’s actions “are an important step in ending pay-off
agreements that allow drug manufacturers to rake in huge profits
while keeping cheaper generic drugs off the market,” Klobuchar
said.

Grassley added that drug companies are still entering into
agreements to stall drug competition, “leaving consumers to pay
higher prices for prescription medications.”

Branded drugs typically lose up to 90 percent of their
market share once a generic comes onto the market.

The FTC’s complaint states that in 2011, Endo generated more
than $825 million, or 30 percent of its total revenue, from
Lidoderm, a pain patch. To stave off a generic threat from
Watson, Endo provided payments and incentives worth $250
million, according to the complaint.

The FTC is seeking an order permanently barring the
companies from engaging in similar behavior and “disgorgement of
the defendants’ ill-gotten gains.”

The FTC alleges Endo paid Impax more than $112 million to
delay the introduction of Opana ER. (Additional reporting by Diane Bartz in Washington)



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