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An Atlanta federal judge’s dismissal of the Federal Trade Commission’s antitrust claims against several pharmaceutical companies that delayed a generic drug’s market rollout through a settlement is a setback for the agency’s opposition to such deals. On Monday, Judge Thomas Thrash Jr. of the Northern District of Georgia dismissed the FTC’s antitrust claims against the companies in In re AndroGel Antitrust Litigation. Thrash’s order also dismissed the antitrust claims of the indirect purchasers, i.e., consumers. He dismissed some, but not all, of the antitrust claims made by direct purchasers, including retailers and wholesalers. The FTC brought antitrust claims against Solvay Pharmaceuticals Inc., which was acquired by Abbott Laboratories this month, and the companies it paid to delay the launch of generic competitors to its testosterone-replacement drug AndroGel. The FTC also sued generic drug companies Watson Pharmaceuticals Inc., Par Pharmaceutical Cos. Inc. and Paddock Laboratories Inc., which partnered with Par at the time. The FTC claimed the companies violated the Federal Trade Commission Act by illegally restraining trade and that Solvay “willfully maintained” an illegal monopoly that violated the act. Abbott is “pleased with the court’s decision that the patent settlement antitrust claims against Solvay lacked merit,” said spokeswoman Adelle Infante. Watson spokesman Charlie Mayr said the settlement of Solvay’s patent infringement lawsuits against Paddock and Watson will result in the 2015 launch of a generic drug of patented technology that expires in 2010. “It’s the latest in several court rulings that have affirmed that patent settlements are pro-competitive and pro-consumer,” Mayr said. The case was “poorly chosen by the FTC,” wrote J. Mark Gidley, a Washington lawyer who represents Paddock and Par. Gidley, who chairs White & Case‘s global antitrust/competition practice, dashed off a quick e-mail before a flight. He also noted that five years came off the patent, and the precedent for such settlements “was clear.” In a written statement, Richard Feinstein, director of the FTC’s Bureau of Competition, said the agency “will continue to use all tools at its disposal to stop anticompetitive pay-for-delay tactics in the U.S. pharmaceutical industry, including litigation.” Feinstein also claimed that brand-name drug firms’ payments to generics not to compete cost consumers about $3.5 billion per year. The Generic Pharmaceutical Association is “encouraged” by the court ruling, said President and Chief Executive Officer Kathleen Jaeger, in a statement. “This decision, along with several other prior court decisions in similar suits brought by the FTC, reaffirms the pro-competitive and pro-consumer nature of patent settlements,” she stated. The court ruling comes amid industry debate about Senate bill 369, the “ Preserve Access to Affordable Generics Act.” The bill, introduced by Sen. Herb Kohl, D-Wis., would bar brand-name drug companies from paying generic drug makers to delay a generic drug’s launch. President Barack Obama’s health care proposal also contains a provision to restrict such settlements, or so-called “pay-for-delay” deals. The FTC’s Feinstein said the AndroGel ruling “underscores the need for a legislative solution” such as the ban on such deals in the president’s health care proposal. “A new law is the quickest and most effective way to serve the interests of the millions of U.S. consumers who take prescription drugs and deserve unfettered access to lower-cost generic alternatives,” stated Feinstein. The Generic Pharmaceutical Association refutes this and is opposing the president’s proposal. “Simply put, a ban on settlements will delay savings from more affordable generic medicines,” stated Jaeger. The Senate Judiciary Committee’s chairman, Sen. Patrick Leahy, D-Vt., meanwhile, filed a written report about the bill, including minority viewpoints, on Feb. 2. The American Intellectual Property Law Association, for example, is battling Kohl’s bill. In a Sept. 9, 2009, letter to Leahy and Sen. Jeff Sessions, R-Ala., the association complained that the bill would make illegal a common type of patent infringement lawsuit settlement between brand name and generic drug manufacturers. “We are deeply concerned that the bill would ban common terms in patent infringement settlements without any consideration of their possible pro-competitive or competitively neutral justifications,” wrote Terry Rae, an intellectual property partner at Washington’s Crowell & Moring, who was the then-president of AIPLA.

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