Break It Up: FTC Files Antitrust Action Against Big Pharma Companies
On January 25, 2021, just weeks after Congress directed the Federal Trade Commission (FTC) to scrutinize the healthcare industry for anti-competitive activity, the FTC filed a meticulously detailed complaint against Endo Pharamceuticals, Inc. and Impax Laboratories, LLC in the District Court for the District of Columbia, alleging that the defendants obtained an unlawful monopoly on the opioid drug oxymorphone ER.
Oxymorphone ER—branded Opana ER by Endo—is an extended-release opioid used to treat moderate to severe pain. According to the FTC’s complaint, Endo developed and released Opana ER a decade ago, and it quickly became one of Endo’s top sellers. Other drug companies, including Impax, soon attempted to release their own versions of the drug. For a while, there were at least three players in the market. That competition, the FTC claims, drove down the price of oxymorphone.
The complaint goes on to describe how Endo challenged competitors with a spate of patent infringement lawsuits, and how, following a complex series of court decisions and settlements, Endo and Impax were effectively the only sellers of oxymorphone ER left in the market. Critically, the complaint alleges, Impax’s remaining viability as a seller of this drug was due to an early settlement of a patent dispute between Endo and Impax that gave Impax licenses under Endo’s then-existing Opana ER patents, and under any future patents Endo might obtain pertaining to Opana ER.
The crux of the FTC’s complaint against Impax and Endo arose in 2017, when, the FTC alleges, the FDA requested that Endo voluntarily remove Reformulated Opana ER from the market. With thinly-veiled criticism for Endo’s concern for its bottom line, the FTC claims that Endo considered multiple strategies for replacing this revenue stream, ultimately deciding on what the FTC characterizes as an anti-competitive arrangement with Impax. Specifically, the complaint alleges that to settle a separate ongoing lawsuit, Endo and Impax agreed to share Impax’s profits on the sale of oxymorphone ER drug. The economic details of Endo and Impax’s agreement are redacted from the complaint.
This case is in the very earliest stage. The docket reflects that the complaint has not yet been served on the defendants. After service, the rules of procedure give defendants a period of twenty-one days to respond, although that period may be altered by agreement of the parties or order of the court. In a case of this complexity, a period of six to twelve months of discovery would not be unusual. We will continue to monitor the progress of this case.
It is remarkable, however, that the FTC has chosen to pursue Endo for allegedly anti-competitive activities when Endo holds multiple patents that—even according to the FTC’s complaint—federal courts have enforced. It will be interesting to see how patent law—which limits competition to incentivize innovation—stacks up against the pro-competition antitrust laws in this litigation.
- Theresa Y. Kananen
- Edward A. Marshall