FTC alleges Solvay made illegal payments to delay generics

The action has been taken by the US Federal Trade Commission (FTC) against Solvay and generic manufacturers Watson Pharmaceuticals and Par Pharmaceutical for allegedly delaying competition to AndroGel until 2015.

It is claimed that after the generics manufacturers sought regulatory approval from the US Food and Drug Administration (FDA) Solvay paid them to delay their patent challenges, giving the company nine years more exclusivity.

David Wales, acting FTC bureau of competition director, said: “Today’s action reaffirms the Commission’s commitment to protect American consumers from artificially high prescription drug prices that result when branded and generic pharmaceutical companies decide to collude rather than compete​.

“The evidence in this case will show that Watson and Par agreed to defer their generic entry for nine years, not out of respect for Solvay’s patent, but due to the size of Solvay’s payments to them​.”

However, the three companies caught up in the case have denied wrongdoing, claiming that the settlements they reached are legal and actually brought forward generic competition by nine years.

Watson and Par filed Abbreviated New Drug Application’s (ANDA) for generic AndroGel in 2003, after which Solvay launched litigation against the companies claiming patent infringement.

This appeared to be resolved in a 2006 agreement in the US District Court for the Northern District of Georgia.

Par has stated that the court’s Consent Judgment said the agreement provided the “opportunity to more productively use money and other resources that would have been spent in the continued prosecution and defense of this litigation​”.

The FTC refers to this settlement in its filing, which can be found here​, but maintains that it was reached on the basis that the companies would share the profits generated through maintaining the monopoly.

It is alleged by the FTC that the companies entered into co-promotion and back-up manufacturing deals that only make sense if they were used to defer generic competition.

However, the FTC has failed in antitrust filings before, with appeals courts in 2005 upholding the legality of settlements made by Schering-Plough and AstraZeneca with generic companies.

Agencies have been paying increasing attention to antitrust matters, with the European Commission’s investigation accusing drugmakers of deliberately delaying the release of generics.