82 Professors Call on Court to Support FTC Decision in Pay-for-Delay Case

The Federal Trade Commission (FTC) was correct in its application of a recent Supreme Court decision and its finding that payments between a generic and brand name drugmaker amounted to a pay-for-delay agreement, 82 professors of law, economics, business and medicine write in an amici curiae brief to the US Court of Appeals for the 5^th Circuit.

In June 2010, the FTC charged that Endo Pharmaceuticals agreed to pay generic drugmaker Impax more than $112 million to abandon its patent challenge and forgo entering the market with its lower-cost generic version of Opana ER for 2½ years. An administrative law judge in 2018 dismissed the FTC’s complaint. But in late March 2019, the FTC ruled that Impax engaged in an illegal pay-for-delay deal.

Now, Impax is trying to overturn that FTC decision, but professors across the country are making clear that the FTC decision was the correct one.

“In short, Impax does not dispute that it received millions of dollars from Endo to delay entering the market,” they wrote, noting that the 2013 Supreme Court ruling involving the FTC and Actavis “makes clear that this violates antitrust law. In the post-Actavis case law, such a concession is unprecedented. The remainder of the brief highlights additional fundamental flaws with Impax’s arguments. But in a nutshell, with Impax conceding the primary issue in dispute, it’s already ‘Game Over.’”

The FTC made clear in its decision that the deal between Impax and Endo included a commitment from Endo that it would not launch an authorized generic, meaning: “The first filer’s revenue will approximately double on average compared to what the first filer would make if it faced authorized generic competition,” FTC said in its complaint. And in this case, Endo used this delay without competition to transition patients to a new formulation of Opana ER, thereby maintaining its monopoly power even after Impax’s generic entry, FTC explained.

“The Commission’s ruling in Impax was the most thorough application of Actavis since the Supreme Court’s decision. And it offered a ringing bipartisan condemnation of pay-for-delay settlements,” the professors added.

They also note how Impax ignores the fact that of the 1336 settlements in the past 15 years, the FTC has challenged only six, which is fewer than ½ of 1 percent.

And despite the Actavis decision by the Supreme Court, the professors explain how the FTC still gave Impax the chance to show that its deal with Endo could have been a unique case in which payment was needed for a pro-competitive settlement.

“But Impax’s lead settlement negotiator conceded that he did not recall ‘(1) whether Impax ever “tried to get a date earlier than January of 2013”; (2) how Endo reacted to the prospect of an earlier date; or (3) whether Endo ever told Impax that it would “not settle the litigation” with an entry date before 2013,’” they write.

Brief Amici Curiae