FTC files testosterone gel complaint

On 2nd February 2009, the Federal Trade Commission announced that it had filed a complaint against brand firm Solvay Pharmaceuticals and generic firms Watson Pharmaceuticals, Par Pharmaceutical Companies and Par’s partner, Paddock Laboratories regarding Solvay’s AndroGel testosterone gel product. The FTC has alleged that the companies violated section 5(a) of the FTC Act, arguing that Solvay entered into agreements with the firms which led to Solvay paying them in return for their not launching generic versions of AndroGel. The FTC’s actions see it return to a familiar and frustrating battle in which it argues that such payment arrangements are anti-competitive, whilst the companies involved argue the exact opposite.

The FTC’s position has for a long time been that agreements in which a branded company essentially pays a generic competitor not to launch a competing product hampers competition and is thus illegal. As an example, in 2001, the FTC brought a lawsuit against Schering-Plough, Upsher-Smith Laboratories and American Home Products alleging such payments regarding Schering’s potassium chloride product, K-Dur 20. Despite settling with AHP, the FTC found little success in the case, with an FTC Administrative Law Judge finding the agreement had been lawful. This led to the FTC overturning the decision, despite it having been made by an FTC judge. However, in 2005, a federal appellate court again found in favour of the companies, and the decision has so far stuck. This, along with another similar decision in 2005 has led to a raft of payment agreements in the years since, which the FTC still contends harms competition by prolonging monopolies.

Given its entrenched view on the matter, it is no surprise that the FTC has again made a complaint. However, the current argument concerning AndroGel does not appear to shed any new light on the issue, and as a result, it seems unlikely that the FTC will succeed this time, either. On the face of it, the FTC’s case is quite sound – Watson gained FDA approval for a generic version of AndroGel in 2006 following the end of the Hatch-Waxman 30-month stay of approval, and Par after that, but did not launch, instead coming to an agreement with Solvay to postpone. However, as always, the devil is in the detail. The patent at the heart of the dispute expires in 2020, with paediatric exclusivity until 2021. Yet, the agreements see generic versions being launched from 2015; the FTC rightfully points out that this is nine years after Watson gained approval, but the firms also rightfully point out that it is five years before the patent expires. The key problem is that although ANDAs were filed with Paragraph IV certifications against the patent, the issue was settled out of court and so the validity of the patent was never tested. As a result, the patent remains in force, which backs up the companies’ argument that the settlement has enabled generic competition ahead of schedule and is therefore pro-competitive. It is hard to see how the FTC can manoeuvre around this problem, and whilst it argues, and probably correctly, that the generic firms entered the agreement not out of respect for Solvay’s patent, but because of the payments Solvay offered, with the patent untested in court, the facts as they stand do not back this up. Unless the FTC can produce compelling evidence, its suspicions will remain nothing more than a hunch.

Ian Platts - Editor, World Generic Markets

US FDA issues import alert for key Ranbaxy products

The US FDA has issued two warning letters to Ranbaxy Laboratories and an import alert for generic drugs produced by the company's Dewas and Paonta Sahib plants in India. The warning letters identify the Agency's concerns about deviations from US cGMP requirements, while the import alert covers more than 30 different generic drug products produced in multiple dosage forms at these two locations.

While the FDA noted that it was confident that other manufacturers could meet market demands, and no product recall had been issued, the Wall Street Journal has reported that some drug stores are looking for alternative suppliers and were nervous that if they did switch they would be liable for cost increases due to contract provisions. Meanwhile, other countries have started to look at bans. In New Zealand, for example, the Health Ministry's drug regulatory arm has said that it was checking with regulators abroad to see if audits since then had given it a clean bill of health, though like the FDA it noted that there were no concerns about the medicines themselves and that users should continue taking the drugs.

This is not the first time that Ranbaxy has been in hot water with US regulators, and represents the second time in less than three years FDA has issued a Warning Letter to Ranbaxy. In 2006, FDA cited the Indian firm for violations of US cGMP at its Paonta Sahib facility. Since then, Ranbaxy has been attempting to resolve the issue with US regulators. However, in 2007, US officials seized documents from Ranbaxy's US headquarters in New Jersey. Furthermore, in July 2008, the US Department of Justice claimed that the company submitted false information about stability and bioequivalence to support ANDAs for antiretrovirals distributed by the President’s Emergency Plan for AIDS Relief (PEPFAR) programme. Prominent Congressmen on the US House Committee on Energy and Commerce indicated at the time that they would commence a formal investigation into the Ranbaxy drug approvals and potential violations of GMP regulations.

Daiichi Sankyo, which agreed to acquire the majority of the voting capital of Ranbaxy in June, has yet to comment on the latest events, though both firms have previously stressed that the share purchase agreement is binding and final. North America is a significant market for Ranbaxy, however; the region constituted around 26% of the firm’s revenues in 2007. Ranbaxy is already looking aggressive in its attempts to overturn the FDA’s ruling, enlisting former New York mayor Rudy Giuliani to represent it in Court in an attention-grabbing move. Nevertheless, the firm may need more than PR to help it out of its current predicament.

Jonathan Way - Editor, World Generic Markets