While the specific case of "IMPAX Laboratories, Inc. v. Par Pharmaceutical Inc." is not directly provided in the sources, the litigation involving IMPAX Laboratories, Inc. and Endo Pharmaceuticals Inc. offers valuable insights into the types of legal issues and antitrust concerns that IMPAX Laboratories has faced. Here is a detailed summary and analysis based on the available information.
Background of the Litigation
The litigation in question involves a dispute between IMPAX Laboratories, Inc. and Endo Pharmaceuticals Inc. regarding a settlement agreement related to the generic version of Endo's branded drug Opana ER (oxymorphone extended-release)[1][2][4].
The Settlement Agreement
In June 2010, IMPAX and Endo entered into a settlement agreement that resolved IMPAX's patent challenge to Endo's Opana ER. Under this agreement, IMPAX agreed to delay its entry into the market with its generic version of Opana ER until January 2013. In return, Endo agreed not to launch an authorized generic version of Opana ER during IMPAX's initial 180 days of marketing its generic product. Additionally, Endo agreed to pay IMPAX up to $40 million for a development and co-promotion deal and to compensate IMPAX if the market conditions changed to devalue the no-authorized generic (no-AG) commitment[1][2].
Antitrust Allegations
The Federal Trade Commission (FTC) initiated antitrust enforcement proceedings against IMPAX and Endo, alleging that the settlement agreement included a "large, unjustified 'reverse payment'" from Endo to IMPAX. This type of payment is considered anticompetitive because it can prevent generic competition and maintain supracompetitive prices[1][2][4].
Trial and Initial Decision
The case went to trial before the FTC's Administrative Law Judge (ALJ) D. Michael Chappell. On May 11, 2018, Judge Chappell issued an initial decision finding that the settlement provided real and substantial procompetitive benefits to consumers, outweighing any anticompetitive effects. He reasoned that the agreement ensured IMPAX 180 days as the sole generic on the market, increased Endo’s expected revenues, and eliminated the risk of IMPAX losing the patent litigation and thus not being able to launch its generic product[4].
FTC Commission's Decision
However, on March 28, 2019, the FTC Commission unanimously reversed Judge Chappell's initial decision. The Commission found that the Complaint Counsel had established a prima facie case of anticompetitive harm because Endo possessed market power and IMPAX received a large and unjustified payment. The Commission also determined that IMPAX failed to show a cognizable procompetitive rationale for the reverse payment and that a less restrictive settlement agreement could have achieved the same benefits without the large payment[1][2].
Final Order and Implications
The FTC's final order barred IMPAX from entering into any type of reverse payment that defers or restricts generic entry, including no-authorized generic commitments, as well as certain business transactions with the branded pharmaceutical manufacturer within 45 days of a patent settlement. This decision highlights the FTC's stance against anticompetitive practices in the pharmaceutical industry and the importance of ensuring that settlement agreements do not harm consumer interests[1].
Key Takeaways
- Antitrust Scrutiny: Settlement agreements in the pharmaceutical industry are subject to strict antitrust scrutiny, particularly when they involve reverse payments.
- Procompetitive Justifications: To justify such agreements, companies must demonstrate clear procompetitive benefits that outweigh any anticompetitive effects.
- FTC Enforcement: The FTC actively enforces antitrust laws to prevent agreements that could maintain supracompetitive prices and reduce generic competition.
- Legal Precedents: The case sets a precedent for future litigation involving similar settlement agreements, emphasizing the need for less restrictive alternatives.
FAQs
Q: What was the nature of the settlement agreement between IMPAX and Endo?
A: The settlement agreement involved IMPAX delaying its generic entry in exchange for Endo not launching an authorized generic and making significant payments to IMPAX.
Q: Why did the FTC challenge this settlement?
A: The FTC challenged the settlement because it included a large, unjustified reverse payment from Endo to IMPAX, which could prevent generic competition and maintain supracompetitive prices.
Q: What was the outcome of the FTC's challenge?
A: The FTC Commission ultimately found that the settlement was anticompetitive and barred IMPAX from entering into similar agreements in the future.
Q: What are the implications of this decision for the pharmaceutical industry?
A: The decision emphasizes the need for pharmaceutical companies to ensure that their settlement agreements do not harm consumer interests and are subject to strict antitrust scrutiny.
Q: Can companies justify reverse payments in settlement agreements?
A: Companies can attempt to justify reverse payments by demonstrating clear procompetitive benefits, but these must outweigh any anticompetitive effects and be achieved through less restrictive means if possible.
Sources
- FTC Overview of FTC Actions in Pharmaceutical Products and Distribution - [PDF][1]
- Complaint Counsel's Motion for Partial Summary Decision - [PDF][2]
- Impax Laboratories Federal Litigation Filings - [Justia][3]
- Impax Laboratories - Supreme Court of the United States - [PDF][4]
