Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Consumer alleges anticompetitive conspiracy to suppress generic competition for pain patch, (Mar 18, 2014)

By Linda O’Brien, J.D., LL.M.

Pharmaceutical manufacturers engaged in restraint of trade by conspiring to exclude competition from the market for a pain medication and improperly maintain their monopoly power in the market for its brand drug and generic substitutes, including through the use of a reverse-payment and market allocation agreement, according to a complaint filed in the federal district court of Philadelphia (Kampanis v. Endo Pharmaceuticals, Inc., March 17, 2014).

Pharmaceutical company Endo Pharmaceuticals, Inc. manufacturers a lidocaine patch sold under the brand name “Lidoderm” that is used for the treatment of pain. According to the complaint, in 2009, pharmaceutical company, Actavis, filed an Abbreviated New Drug Application (ANDA) with the Food and Drug Administration (FDA), seeking approval to manufacture and sell a generic equivalent to Lidoderm. Endo filed suit for alleged infringement of its U.S. Patent No. 5,827,529 (the “529 patent”) for Lidoderm. Actavis asserted in defense that inequitable conduct undermined the validity of the patent. In 2012, Endo and Actavis agreed to settle the patent litigation, whereby Actavis would drop its challenge to the Lidoderm patent and delay selling its less expensive generic equivalent until September 2013 in exchange for a free supply of branded Lidoderm that Actavis could resell at supracompetitive prices. Endo also agreed to delay the launch of an authorized generic version of Lidoderm until after Actavis entered the market.

The complaint claimed that Endo’s lawsuit was intended to protect Endo’s monopoly and avoid competition on Lidoderm. The plaintiff is a consumer who purchased Lidoderm. A generic version of Lidoderm would have been available to the plaintiff as early as August 2012, when Actavis received final FDA approval. As a result of the unlawful and anticompetitive agreement by the defendants, the plaintiff has had to pay overcharges for the brand drug, it was alleged.

The agreement between Endo and Actavis was intended to and has in fact (1) delayed or precluded the launch of less expensive generic equivalents to Lidoderm; (2) fixed the prices of lidocaine patch products at supracompetitive levels; (3) allowed Endo to monopolize the market for lidocaine patches in the United States; and (4) allocated 100 percent of the lidocaine patch market to Endo, the complaint charged.

The plaintiff asserts claims for monopolization, conspiracy to monopolize, conspiracy in restraint of trade, unjust enrichment, and violations of Sections 1 and 2 of the Sherman Act. The action seeks declaratory and injunctive relief, treble damages, disgorgement, restitution, costs of suit, attorneys’ fees, and any other just and proper relief.

The case is No. 2:14-cv-01562-GP.

Attorneys: Robert Sink (Law Offices of Robert W. Sink) for Irene Kampanis

Companies: Endo Pharmaceuticals, Inc.; Teikoku Pharma USA, Inc.; Teikoku Seiyaku Co. Ltd.; Actavis, Inc.; Watson Pharmaceuticals, Inc.; Watson Laboratories, Inc.; Anda, Inc.; Anda Pharmceuticals, Inc.; Valmed Pharmaceuticals, Inc.

News: Antitrust PennsylvaniaNews