FTC Asks - Again - to File Amicus in Drug Patent Case

Flush from its victory earlier this year before the U.S. Supreme Court, the Federal Trade Commission has asked to submit an amicus curiae brief in a New Jersey federal case involving a drug patent settlement that delayed generic competition. The FTC wants to weigh in on In re Effexor XR Antitrust Litigation, which challenges an agreement between drug makers Wyeth Pharmaceutical Co. and Teva Pharmaceuticals USA Inc. over the blockbuster antidepressant Effexor XR. According to the FTC, generic giant Teva agreed to delay introducing generic Effexor XR until July 1, 2010, and in return, brand-name maker Wyeth agreed to hold off marketing a competing "authorized generic" version of the drug for a period of time. Authorized generics are made by the brand-name drug maker. They're chemically identical to the brand-name drug, and are launched as a way to siphon off generic sales, especially during the180-day exclusivity period reserved for the first-filing generic under the Hatch-Waxman Act. It's "an issue with significant implications for American consumers," according to the FTC, which in a 2011 study found that consumers pay less when a brand-name drug maker launches an authorized generic to compete with the regular generic. To the FTC, agreements involving authorized generics should be subject to the same antitrust analysis as those involving reverse payments (when a brand-name drug maker pays a generic rival to drop a patent challenge and hold off market entry). In FTC v. Actavis, the Supreme Court held that such agreements are not immune from antitrust scrutiny and are to be evaluated using traditional antitrust factors. In the Effexor case, pending in U.S. District Court for the District of New Jersey, the defendants argue that the Actavis holding does not apply, because that agreement involved a cash payment, and theirs does not. In its motion to file an amicus brief, the FTC notes that "the antitrust treatment of no-authorized-generic commitments has serious long-term implications for all consumers, not just the private parties in this matter," but it's not clear the court will agree to accept the brief. Last year, Judge Joel Pisano said no, ruling in part that "the extent to which the FTC is partial to a particular outcome weighs against granting the agency's motion" to file an amicus brief. The case was reassigned to Judge Peter Sheridan in June, and the FTC is now trying again, arguing that the Actavis decision changes the calculation. "The Court's ruling and its interpretation of Actavis could affect potential FTC enforcement actions," according to the agency. Besides, the FTC said, it has no position on the outcome of this particular case, and Pisano "failed to distinguish between two entirely different meanings of the term partial: partial in the sense of the FTC's clearly expressed interest in protecting consumers, versus partial in the sense of preferring that one side ultimately prevails in the litigation." The FTC assured the court that "while the FTC has an interest in the development of the law concerning no-authorized-generic commitments, it takes no position with regard to the ultimate outcome in this case." Besides, the agency said, it wants to set the record straight. "Defendants make arguments based on misrepresentations of FTC statements and positions to support their arguments," the FTC's motion states. "The plaintiffs in this case were not involved in the FTC's decision-making in either of these instances, and they cannot competently represent what the FTC decided." Plainitffs lawyers include John Radice of the Radice Law Firm, Peter Pearlman of Cohn, Lifland, Pearlman, Herrmann & Knopf and Dianne Nast of NastLaw. Wyeth is represented by Amy Boddorff and Megan Despasquale of White & Case and Liza Walsh and Rukhsanah Singh of Connell Foley. Teva has turned to Allyn Zissel Lite, Mayra Velez Tarantino and Michael Patunas of Lite, DePalma Greenberg.

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