Introduction
The Federal Trade Commission (FTC) has been engaged in a prolonged and complex litigation against Endo Pharmaceuticals Inc., Endo International plc, Impax Laboratories, LLC, and Amneal Pharmaceuticals, Inc., alleging significant anticompetitive conduct in the pharmaceutical market. This article delves into the key aspects of the litigation, including the allegations, legal framework, and the implications of the case.
Background of the Litigation
The FTC's lawsuit, filed on January 25, 2021, in the U.S. District Court for the District of Columbia, centers around an agreement between Endo Pharmaceuticals and Impax Laboratories that allegedly violated antitrust laws. This agreement pertains to the market for oxymorphone ER, a long-acting opioid used to treat moderate to severe pain[1][4].
Allegations Against Endo and Impax
The FTC alleges that Endo and Impax entered into an illegal agreement in August 2017, which eliminated potential competition in the oxymorphone ER market. Here are the key allegations:
- Monopoly Profits: The agreement allowed Impax to maintain monopoly power in the market, enabling it to charge higher prices. Endo, in turn, was paid to stay out of the market, thereby sharing in the monopoly profits[1][4].
- Reverse Payment Settlements: This agreement was a continuation of earlier anticompetitive practices. In 2010, Endo paid Impax over $112 million not to compete with its generic version of Opana ER, a settlement that the FTC previously found to be an illegal reverse-payment settlement[1][2].
- Safety Concerns and Market Dynamics: Following the FDA's request for Endo to withdraw its reformulated Opana ER due to safety concerns, Impax's generic version became the only extended-release oxymorphone drug on the market. The 2017 agreement ensured that Endo would not re-enter the market, solidifying Impax's monopoly position[1].
Legal Framework
The FTC's complaint charges the defendants with violating several key antitrust laws:
- Sherman Act: The defendants are accused of violating Sections 1 and 2 of the Sherman Act, which prohibit agreements in restraint of trade and monopolization, respectively[1][4].
- FTC Act: The conduct is also alleged to constitute unfair methods of competition in violation of Section 5 of the FTC Act[1][4].
Implications and Relief Sought
The FTC seeks significant relief to address the anticompetitive effects of the agreement:
- Monetary Relief: The FTC is seeking monetary relief to compensate for the ill-gotten gains resulting from the alleged anticompetitive conduct.
- Injunctive Relief: The commission seeks injunctive relief to undo the ongoing competitive harm caused by the agreement.
- Permanent Injunction: A permanent injunction is requested to prevent Endo, Impax, and Amneal from engaging in similar anticompetitive conduct in the future[1][4].
Court Proceedings and Appeals
The case has seen several developments in the court:
- District Court Filing: The complaint was filed in the U.S. District Court for the District of Columbia on January 25, 2021, with a 3-2 vote by the FTC commissioners[1].
- Appeals: The matter is currently on appeal in the U.S. Court of Appeals for the D.C. Circuit, filed on May 24, 2022[3].
Industry Impact and Public Health Concerns
The case highlights significant concerns about the impact of anticompetitive practices on public health and consumer welfare:
- Price Impact: By eliminating competition, the agreement allowed Impax to charge monopoly prices, which can be detrimental to consumers who rely on affordable medications.
- Innovation: Anticompetitive agreements can stifle innovation by reducing the incentive for companies to develop new drugs or generic alternatives[1].
Quotes from Industry Experts
Gail Levine, Deputy Director of the Bureau of Competition at the FTC, emphasized the importance of stopping such anticompetitive conduct:
"The agreement between Endo and Impax has eliminated the incentive for competition, which drives affordable prices... By keeping competitors off the market, the agreement lets Impax continue to charge monopoly prices while Endo and Impax split the monopoly profits."[1]
Statistics and Financial Impact
- Revenue Impact: Endo's Opana ER generated nearly $160 million in revenues in 2016 alone, indicating the significant financial stakes involved in this market[1].
- Settlement Payments: The 2010 settlement where Endo paid Impax over $112 million not to compete is a stark example of the financial incentives behind these agreements[1].
Key Takeaways
- Anticompetitive Agreements: The case underscores the FTC's commitment to combating anticompetitive agreements that harm consumers and stifle competition.
- Monopoly Power: The allegations highlight how such agreements can lead to monopoly power, resulting in higher prices and reduced innovation.
- Public Health: The impact on public health is significant, as affordable access to medications is crucial for consumer welfare.
- Legal Framework: The case reinforces the importance of antitrust laws in preventing unfair methods of competition and monopolization.
FAQs
What is the main allegation against Endo and Impax in the FTC lawsuit?
The main allegation is that Endo and Impax entered into an agreement that eliminated competition in the oxymorphone ER market, allowing Impax to charge monopoly prices and sharing the profits with Endo.
Which antitrust laws are allegedly violated by the defendants?
The defendants are accused of violating Sections 1 and 2 of the Sherman Act and Section 5 of the FTC Act.
What was the financial impact of Endo's Opana ER in 2016?
Endo's Opana ER generated nearly $160 million in revenues in 2016.
Why did the FDA request the withdrawal of Endo's reformulated Opana ER?
The FDA requested the withdrawal due to safety concerns about increased intravenous abuse associated with the reformulated version.
What relief is the FTC seeking in this case?
The FTC is seeking monetary relief, injunctive relief to undo the competitive harm, and a permanent injunction to prevent similar conduct in the future.
Sources
- FTC Again Charges Endo and Impax with Illegally Preventing Competition in U.S. Market for Oxymorphone ER. Federal Trade Commission, January 25, 2021.
- Endo Pharmaceuticals / Impax Labs. Federal Trade Commission.
- FTC v. Endo Pharmaceuticals Inc., et al 22-5137. Justia Dockets.
- Endo Pharmaceuticals Inc./Amneal Pharmaceuticals Inc.. Federal Trade Commission, January 25, 2021.
- Allergan, Watson and Endo. Federal Trade Commission.
