Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Welfare benefit fund alleges conspiracy to suppress generic competition for pain medication, (Jul 22, 2014)

By Linda O’Brien, J.D., LL.M.

A welfare benefit fund has filed a complaint in the federal district court of Philadelphia on behalf of itself and other end-payor purchasers of Opana ER, the brand name prescription for the treatment of chronic pain, alleging that the manufacturer and several generic drug manufacturers engaged in restraint of trade by conspiring to exclude competition from the market for Opana, including the use of exclusion payment agreements (Massachusetts Bricklayers & Masons Health and Welfare Fund v. Endo Health Solutions, Inc., July 17, 2014).

Endo Pharmaceuticals manufactures and sells oxymorphone hydrochloride, an opioid used for the treatment of chronic pain, under the brand name “Opana.” According to the complaint, after its original patent expired, Endo licensed four patents from Penwest Pharmaceuticals and developed extended release oxymorphone hydrochloride tablets, named Opana ER. To block generic competition for Opana ER, Endo filed suit against generic drug manufacturers Impax, Actavis, Sandoz, Inc., Barr Laboratories, Roxane Laboratories, and Watson Laboratories, each of which sought to market generic extended release oxymorphone hydrochloride, for purportedly infringing on its time release patents.

The complaint alleges that Endo entered into an exclusive payment agreement to end its patent litigation with Impax, the first generic drug manufacturer to submit an application to the U.S. Food and Drug Administration (FDA) for approval to sell a generic version of Opana ER. The agreement provided for a $102 million cash payment to Impax to delay the launch of its generic extended release oxymorphone hydrochloride for two and a half years. Shortly thereafter, Endo filed a new drug application with the FDA for approval of a new formulation of crush resistant Opana ER, named Opana ER CRF.

After receiving FDA approval, Endo launched Opana ER CRF in 2012 and began converting all Opana ER prescriptions to Opana ER CRF. Having extended its monopoly over the extended release oxymorphone hydrochloride market for an additional two and a half years, Endo ended its patent litigation with Actavis, Sandoz, Barr, Roxane, and Watson. The exclusive payment agreements created a bottleneck whereby no generic drug manufacturer could come to market until after Impax had been on the market with its generic version for 180 days, the complaint charged.

Massachusetts Bricklayers & Masons Health & Welfare Fund provides health and welfare benefits to its participants and their dependents. The exclusive payment agreements were designed and did in fact delay the entry of less expensive generic Opana ER and allocated 100 percent of the U.S. market for Opana ER and its generic equivalents to Endo for two and a half years. A generic version of Opana ER would have been available to the plaintiff as early as June 2010, absent the exclusive payment agreements by the defendants. The fund would have substituted the less expensive generic versions for their purchases of brand Opana ER long before Impax launched its generic drug in January 2013. Endo allegedly entered into the exclusive payment agreements to protect its stream of monopoly profits at the expense of purchasers of Opana ER.

The plaintiff asserts claims for restraint of trade, monopolization, attempted monopolization, unfair competition, unjust enrichment, and violations of Section 1 of the Sherman Act. The action seeks declaratory and injunctive relief, treble damages, disgorgement, interest, attorney fees, costs of suit, and any other just and proper relief.

The case is No. 2:14-cv-04355-ER.

Attorneys: Robert S. Kitchenoff (Weinstein Kitchenoff & Asher LLC), Gregory S. Asciolla (Labaton Sucharow LLP), and Michael P. Thornton (Thornton Naumes LLP) for Massachusetts Bricklayers & Masons Health and Welfare Fund.

Companies: Massachusetts Bricklayers & Masons Health and Welfare Fund; Endo Health Solutions, Inc.; Endo Pharmaceuticals, Inc.; Penwest Pharmaceuticals Co.; Impax Laboratories, Inc.

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