In what is being called a win for consumers, a U.S. appeals court upheld a decision by the Federal Trade Commission that a so-called pay-to-delay deal between two drug makers was anti-competitive.
At issue was a deal reached in 2010 between Endo International (ENDP) and Impax Laboratories, which agreed not to market a generic version of the Endo’s Opana ER painkiller for three years in exchange for $112 million. At the time, the opioid generated $172 million in sales, or about 12% of total Endo revenue. The FTC argued the deal meant Endo would not face lower-cost competition until at least January 2013 and, as a result, consumers and other buyers paid “hundreds of millions of dollars a year more” for the medicine.
Such agreements have long been controversial. In these deals, a brand-name drug maker settles a patent lawsuit by paying cash or transferring something else of value to a generic rival that agrees to delay launching a copycat medicine until a specific date in the future. This gives the brand-name drug maker more time to sell its medicine without lower-cost competition.