Federal Trade Commission sues AbbVie and Teva
pharmafile | September 9, 2014 | News story | Manufacturing and Production, Sales and Marketing | AbbVie, FTC, Teva, androgel, federal trade commission
Authorities in the US claim that AbbVie and Teva filed ‘sham’ lawsuits in a complicated pay-to-delay case for generic forms of the testosterone replacement treatment AndroGel.
The Federal Trade Commission (FTC) says it has now filed in federal district court, a charge against the US Humira drugmaker and the Israeli generic manufacturer with “illegally blocking American consumers’ access” to lower-cost versions of the blockbuster drug AndroGel (isopropyl myristate or IPM).
This case is the second time the FTC has filed a complaint on AndroGel, AbbVie’s second-highest-selling product. The drug had sales of $472 million in the first half of 2014.
The FTC’s complaint alleges that AbbVie and its partner Besins Healthcare filed ‘baseless patent infringement’ lawsuits against potential generic competitors to delay the introduction of lower-priced versions of AndroGel.
While the lawsuits were pending, AbbVie is alleged to have then entered into an anti-competitive pay-for-delay settlement agreement with Teva Pharmaceuticals USA, to further delay generic drug competition.
“The FTC is acting today to stop anti-competitive conduct by AbbVie, Besins Healthcare and Teva which has forced consumers to overpay hundreds of millions for the drug AndroGel,” says FTC chairwoman Edith Ramirez.
“This action also reinforces the Commission’s longstanding commitment to protect American consumers from collusive arrangements between branded and generic pharmaceutical companies that inflate the prices of prescription drugs and harm competition.”
The FTC says it is seeking a court judgment declaring that the companies – which also includes Abbott, which AbbVie was one a part of until 2013 – violated the FTC Act.
This law orders the companies to ‘disgorge their ill-gotten gains’, and permanently bars them from engaging in similar anti-competitive behaviour in the future.
Sham cases
The FTC is accusing AbbVie of filing ‘baseless’ patent infringement lawsuits against Teva and a second generics company called Perrigo, to stop them from selling generic AndroGel.
AbbVie then reached an agreement with Teva in which the world’s largest generic drugmaker agreed to refrain from bringing out a cheaper version of AndroGel, in exchange for winning AbbVie’s permission to sell an authorised generic of the cholesterol drug Tricor (fenofibrate).
This drug made annual US sales of more than $1 billion in 2011– meaning this deal was highly profitable for Teva, but made ‘no independent business sense’ for AbbVie.
The FTC says in a statement: “Overall, this anti-competitive conduct blocked competition from both Teva’s and Perrigo’s lower-cost substitutes for brand-name AndroGel, and preserved AbbVie’s and Besins’s AndroGel monopoly for a substantial period of time.”
The five-member FTC commission, who decides whether this case should go ahead, was split along party political lines. The chairwoman, Edith Ramirez, and two fellow Democrats voted to approve the filing of the lawsuit, whilst the two Republicans voted no. It eventually went 3-2 in favour of filing the complaint.
Pay-for-delay
This complaint follows a long line of cases over the past decade where the FTC has cracked down on anti-competitive conduct in the pharma industry.
A Federal Trade Commission’s staff report in 2011 found the number of these so-called pay-for-delay agreements increased by more than 60%; from 19 in 2009 to 31 in 2010.
Overall, the deals reached in the latest fiscal year involved 22 brand-name pharma products, with combined annual US sales of around $9.3 billion.
In another FTC staff study published alongside this report, the FTC found that such settlements delay generic entry by an average of 17 months longer when compared to companies that have not received a payment.
Pay-for-delay deals occur when pharma firms compensate generic companies for delaying the launch of a cheaper version of their branded drug after it has gone off patent.
This extends the amount of time the branded drug can remain unchallenged by cheaper generic versions, allowing pharma to eke out more revenue for a relatively small payment to the generic firms.
This is especially effective for blockbuster drugs whose annual revenue exceeds one billion dollars.
Ben Adams
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