Shares of Endo Pharmaceutical (ENDP) fell in morning trading in New York after the Federal Trade Commission announced that it was suing the company for blocking generic versions of its Opana ER and Lidoderm. Opana ER is an extended-release opioid used to relieve moderate to severe pain and Lidoderm is a topical patch used to relieve pain associated with post-herpetic neuralgia, a complication of shingles.
WHAT’S NEW: Before the market open, the Federal Trade Commission announced in a statement that it filed a complaint in federal district court claiming that Endo and several other drug makers violated antitrust laws by using pay-for-delay settlements to block consumers’ access to cheaper generic versions of severe pain treatments Opana ER and Lidoderm. Commission chairwoman Edith Ramirez commented that such agreements harm consumers twice, first by “delaying the entry of generic drugs” and second by “preventing generic competition in the market following generic entry.” The FTC’s suit claims that Endo paid the first generic companies that filed for FDA approval, which were Impax Laboratories (IPXL) and Watson Laboratories, which is owned by Allergan (AGN), to cut out the risk of competition for Opana ER and Lidoderm. The complaint seeks a court judgement declaring that the defendants’ conduct violated antitrust laws, the disgorgement of their “ill-gotten gains,” as well as a permanent injunction barring them from future anti-competitive behavior.
WHAT’S NOTABLE: The move marks the first time the FTC challenged an agreement not to market an authorized generic as a form of reverse payment.
PRICE ACTION: In morning trading in New York, Endo fell 6.26% to $26.68.
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