Feds: ‘Sham’ lawsuits stopped generic drug

The Federal Trade Commission filed a lawsuit on Monday alleging that several pharmaceutical giants struck illegal deals to keep the generic version of a billion-dollar drug off the market. 

{mosads}The FTC claims that the drug makers AbbVie Inc and its partner, Besins Healthcare Inc., made “sham” legal challenges to halt the production of a lower-priced version of a testosterone replacement drug called AndroGel.  

That delay has forced consumers to overpay millions of dollars, FTC Chairwoman Edith Ramirez said Monday.

The companies filed patent infringement lawsuits in 2011, which prevented other companies from developing AndroGel for at least 30 months under federal law. The drug makes $1 billion in annual U.S. sales.

“We believe the actual basis of filing patent lawsuits was to extend the significant monopoly profits at the expense of consumers,” Ramirez said during a call with reporters.

Around the same time, AbbVie approved a settlement with another company, Teva Pharmaceuticals USA, over a different billion-dollar drug. The FTC alleged that the companies’ agreement took place because Teva Pharmaceuticals agreed not to pursue a generic version of AndroGel.

The FTC has aggressively sought out this kind of “pay-for-delay” settlement, which are estimated to cost consumers $3.5 billion per year, according to the agency’s report in 2010.

The Supreme Court ruled last year that pharmaceutical companies could be sued for anti-trust violations if they paid rivals not to develop generic brands of their drugs. That decision also involved AndroGel, though it was the result of a separate legal challenge.

The lawsuit marks the FTC’s second pending “pay for delay” case since the Supreme Court ruling.

The commission voted 3-2 along party lines to support the lawsuit, which was filed in a federal district in Pennsylvania.