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

Warner Chilcott end Femcon and Loestrin generic challenges

Warner Chilcott has been able to resovle a number of litigation cases against its proprietary oral contraceptives, Femcon Fe and Loestrin 24 Fe. Femcon was a chewable version of Ovcon 35, an oral contraceptive that has been on the market since before 1982. The chewable version was approved by the FDA in November 2003, and was the first chewable oral contraceptive, manufactured by Bristol-Myers Squibb and marketed by Warner Chilcott. The chewable version of Ovcon 35 was granted three years exclusivity in late 2003, to expire in November 2006, and a patent was granted for the drug which does not expire until 6th April 2019. In the case of Lostrin 24, Galen originally acquired the Loestrin brand from Pfizer, and in early 2006 was granted approval for Loestrin 24 Fe; that product is protected by a patent listed in the FDA’s Orange Book which is set to expire in July 2014.

Despite the long lead times left on the two patents protecting the two oral contraceptives, Warner Chilcott has faced generic challengers for both. Barr Laboratories filed an ANDA for a generic version of Femcon Fe in April 2007, leading to a patent challenge initiated that summer. Watson Pharmaceuticals also filed an ANDA for a generic version in 2007, leading to a lawsuit filed against it in October 2007. In the case of Loestrin 24 Fe, Warner Chilcott filed a lawsuit in the US District Court of New Jersey alleging patent infringement almost as son as the drug had entered the market, with a case against Berlex and Schering AG. Warner Chilcott alleged the firms were infringing Loestrin’s patent by marketing their YAZ oral contraceptive. A few months later, in June 2006, Warner Chilcott received an ANDA notice from Watson Laboratories notifying of an application to market a generic version of the oral contraceptive, leading to another lawsuit in the New Jersey court alleging patent infringement. The YAZ litigation was settled early, in November 2006, with Schering making payments to Warner Chilcott.

Now, in a series of agreements over December 2008 and January 2009, Warner Chilcott has settled the litigation with Barr and Watson (see p. 8). The settlement with Barr concerns Femcon Fe, and gives Barr the option to launch its generic version in 2012, seven years ahead of the 2019 patent expiration. Warner Chilcott also entered into a patent settlement agreement with Watson regarding Femcon Fe. Under the terms of this, Watson will have to wait until 180 days after Barr launches its version, or January 2013, whichever comes earlier. With regard to Loestrin 24 Fe, an agreement has been made with Watson whereby Watson will be able to commence marketing its version in January 2014, or earlier if another generic enters the market. It is interesting to note that once again, a settlement has been made which effectively allows a generic firm to launch its version as an authorised generic in order to sabotage sales from a third party.

Ian Platts - Editor, World Generic Markets

Authorised generic deals come to the fore

The end of June saw a spate of authorised generic deals in the United States. On 24th June, Barr Laboratories entered into supply and licensing agreements for authorised generic versions of Bayer's Yasmin and YAZ (both drospirenone + ethinyloestradiol) oral contraceptive (OC) products. Under the Yasmin agreement, Bayer will supply Barr with an authorised generic version for launch on 1st July 2008; several years earlier than the last-to-expire Bayer patent listed in the FDA's Orange Book. In March, the US District Court for the District of New Jersey ruled in favour of Barr, in the challenge of the patent listed by Bayer's Yasmin product.

On 30th June 2008, under a supply agreement with Solvay Pharmaceuticals, Watson Pharmaceuticals launched an authorised generic dronabinol. Dronabinol is a generic version of Unimed Pharmaceuticals' (Solvay) Marinol capsules. Under the terms agreed, Solvay will supply the dronabinol capsules to the company's subsidiary, Watson Pharma, which will market, sell and distribute the product in the United States. Solvay will receive a share of the profits from Watson's sales of the generic product in the US market. Further details have not been disclosed.
On the same day, Janssen, a division of Ortho-McNeil-Janssen Pharmaceuticals (Johnson & Johnson), launched an authorised generic version of its antipsychotic agent, Risperdal (risperidone), through Patriot Pharmaceuticals (McNeil-PPC [J&J]). This development is a reaction to the FDA granting final approval for Teva Pharmaceutical Industries' ANDA to market a generic version of the drug. As the first company to file an ANDA containing a Paragraph IV certification for this product, Teva has been awarded a 180-day period of marketing exclusivity and shipment has commenced. Generic risperidone could hurt J&J badly, as sales of the Risperdal franchise totalled US$4,549 million in 2007, accounting for 18.3% of pharmaceutical revenue.

The past three years have seen a growing number of authorised generic agreements in the USA; this recent sudden flurry may create more interest in Congress. The last two sessions of Congress have seen attempts at legislation to ban the practice; S. 438 currently languishes at committee stage in the Senate. The long-anticipated publication of an FTC report on the matter may provide a tipping point in support for the legislation; this was anticipated in 2007, yet has still not materialised. Meanwhile, most branded companies now have a policy of issuing authorised generic licences; in the current economic climate, and with significant patent expiries on the horizon, the practice is unlikely to be halted any time soon.

Jonathan Way - Editor, World Generic Market