FTC: Pharmaceutical companies filed ‘baseless’ patent lawsuits to block AndroGel generic

By Jessica M. Karmasek | Sep 11, 2014

WASHINGTON (Legal Newsline) -  The Federal Trade Commission is suing several major pharmaceutical companies, saying they illegally blocked consumer access to lower-cost versions of the drug AndroGel.

The FTC filed its complaint in the U.S. District Court for the Eastern District of Pennsylvania. It was filed under seal in the federal court Monday, but a redacted version was made public.

The named defendants are AbbVie Inc.; AbbVie’s predecessor company, Abbott Laboratories; its wholly-owned subsidiary, Unimed Pharmaceuticals LLC; Besins Healthcare Inc.; and Teva Pharmaceuticals USA Inc.

The FTC’s complaint alleges that AbbVie and its partner Besins Healthcare filed “baseless” patent infringement lawsuits against potential generic competitors to delay the introduction of lower-priced versions of AndroGel.

AndroGel is a topical pharmaceutical gel product approved for testosterone replacement therapy in men with low testosterone. Its annual U.S. sales top $1 billion.

While the lawsuits were pending, AbbVie also entered into an anticompetitive settlement agreement with Teva to further delay generic drug competition, the commission’s complaint alleges.

“The FTC is acting today to stop anticompetitive conduct by AbbVie, Besins Healthcare and Teva, which has forced consumers to overpay hundreds of millions for the drug AndroGel,” FTC Chairwoman Edith Ramirez said Monday.

“This action also reinforces the commission’s longstanding commitment to protect American consumers from collusive arrangements between branded and generic pharmaceutical companies that inflate the prices of prescription drugs and harm competition.”

At issue in the alleged sham patent infringement suit is an ingredient in branded AndroGel called isopropyl myristate or IPM. IPM is known as a “penetration enhancer” because it speeds the delivery of the drug’s active ingredient, testosterone, through the skin and into the bloodstream.

The patent on branded AndroGel covers only a formulation using IPM as the penetration enhancer, according to the FTC complaint.

Although Teva and Perrigo Company developed testosterone gel products that did not contain IPM and used different penetration enhancers than AndroGel, AbbVie and Besins sued Teva and Perrigo for patent infringement.

Under federal law, these lawsuits triggered an automatic 30-month stay of the U.S. Food and Drug Administration’s authority to approve Teva’s and Perrigo’s applications to market their testosterone gel products, regardless of the merits of the infringement claims.

The commission alleges that AbbVie and Besins had “no reasonable basis” to contend that Teva’s and Perrigo’s penetration enhancers were equivalent to IPM and therefore covered by the narrow AndroGel formulation patent.

In response, Teva asserted an antitrust counterclaim that the infringement suit constituted sham litigation.

However, the FTC alleges that Teva then recognized it would be more profitable to reach an agreement with AbbVie to share the monopoly profits from AndroGel than to compete.

Under that agreement, Teva abandoned its countersuit and agreed to refrain from launching its lower-cost AndroGel alternative until a specified date, according to the FTC’s complaint.

In exchange, AbbVie paid Teva in the form of an authorized generic deal for an unrelated product -- a cholesterol drug called Tricor -- that was highly profitable for Teva.

“This authorized generic deal does not make sense for AbbVie defendants as an independent business transaction; it only makes sense as a means to induce Teva to drop its patent challenge and refrain from competing with AndroGel for several years,” the FTC’s complaint states.

The commission is seeking a court judgment declaring that the defendants’ conduct violates the Federal Trade Commission Act, ordering the companies to “disgorge their ill-gotten gains” and permanently barring them from engaging in similar anticompetitive behavior in the future.

As of Thursday, the case was reassigned from Judge Robert F. Kelly to Judge Harvey Bartle III.

Neither AbbVie nor Teva could immediately be reached for comment.

From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.

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