Antitrust Law Daily Wrap Up, TOP STORY: ADHD drug manufacturers settle FTC charges of illegal non-compete agreement, (Aug 18, 2015)

By Greg Hammond, J.D.

Pharmaceutical companies Concordia Pharmaceuticals Inc., Concordia Healthcare Corp., Par Pharmaceutical, Inc., Par Pharmaceutical Holdings, Inc., and TPG Partners VI, L.P. have settled FTC charges that they entered into an illegal agreement not to compete concerning Kapvay, a prescription drug used to treat Attention Deficit Hyperactivity Disorder (ADHD). In settling the restraint of trade charges, Concordia and Par agreed not to enforce the anticompetitive provisions of the agreement (In the Matter of Concordia Pharmaceuticals Inc., File No. 151 0030).

The FTC charged in its administrative complaint that Concordia and Par signed a License Agreement whereby Concordia granted Par the right to market its generic Kapvay product, and agreed not to market or permit a third party to market an authorized generic version of Kapvay for a period of five years. In exchange, Par agreed to share with Concordia a substantial portion of the profits for the sales of its generic Kapvay product, ranging from 35 to 50 percent. The FTC claims that the unlawful agreement restrained trade and constituted an unfair method of competition in violation of Section 5 of the FTC Act.

“By signing this agreement not to compete shortly before Concordia’s patent covering branded Kapvay ended, Concordia and Par reduced the number of competing generic Kapvay products available to consumers, depriving consumers of the lower prices that typically occur with generic competition,” stated FTC Bureau of Competition director Debbie Feinstein.

In settling the FTC’s charges, Par has agreed to cease and desist from enforcing or attempting to enforce the non-compete provision of the license agreement and from entering into or attempting to enter into any combination, conspiracy, or agreement that prohibits or delays generic entry. Similarly, Concordia has relinquished the right to receive, and shall not receive, any other payment pursuant to the license agreement.

Attorneys: Michael F. Brockmeyer (Frommer, Lawrence & Haug LLP) for Par Pharmaceutical, Inc., Par Pharmaceutical Holdings, Inc., and TPG Partners VI, L.P. Christine A. Varney (Cravath, Swaine & Moore LLP) for Concordia Healthcare Corp. and Concordia Pharmaceuticals Inc. Malcolm L. Catt, FTC Bureau of Competition.

Companies: Par Pharmaceutical, Inc.; Par Pharmaceutical Holdings, Inc.; TPG Partners VI, L.P.; Concordia Healthcare Corp.; Concordia Pharmaceuticals Inc.

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