Par Pharmaceutical Companies, Inc. has learned that the Federal Trade Commission and the California Attorney General filed a lawsuit against Par in the U.S. District Court for the District of Central California. The FTC lawsuit makes antitrust and other allegations about a patent settlement agreement that was approved by the U.S. District Court for the Northern District of Georgia in 2006. The 2006 court-approved settlement ended litigation between Par Pharmaceutical, Paddock Laboratories and plaintiff Solvay Pharmaceuticals over Paddock and Par’s filing of an Abbreviated New Drug Application for a generic version of Solvay’s AndroGel(R) 1% testosterone gel product. Under the terms of the 2006 court-approved settlement, Par is permitted to begin marketing testosterone gel 1% in August 2015 — five years prior to the expiration of the AndroGel(R) patent, which expires on August 30, 2020, excluding AndroGel(R)’s six-month pediatric marketing exclusivity. Par was the second ANDA filer for testosterone gel 1% and therefore not eligible for 180 days of marketing exclusivity. However, the 2006 settlement allowed Par’s early entry date to be the same as that obtained by the first ANDA filer. Par issued a press release on September 13, 2006 addressing further details of the 2006 court-approved settlement and contemporaneous business agreements. The U.S. District Court for the Northern District of Georgia Approved the Settlement in 2006 In September 2006, Par’s settlement with the makers of AndroGel(R) was entered and approved by the U.S. District Court for the Northern District of Georgia. The court’s Consent Judgment described the settlement as “a good faith final settlement agreement . . . .” The court’s Consent Judgment added that the settlement provided the parties with the “opportunity to more productively use money and other resources that would have been spent in the continued prosecution and defense of this Litigation, to the benefit of the Parties and consumers alike . . . .” Furthermore, in ending the three-year patent litigation in the Northern District of Georgia, the Consent Judgment expressly acknowledged that the settlement enabled generic entry “five years earlier than could be achieved if 1/8the generic companies3/8 were permanently enjoined during the life of the 1/83/8 patent.” The 2006 Court-Approved Settlement Was Approved Under the Same Eleventh Circuit Law that Rejected the FTC’s Schering-Plough Case In 2001, the FTC brought an enforcement action against Schering-Plough Corporation and Upsher-Smith Laboratories, Inc. in which the FTC’s judge concluded that there was nothing anticompetitive about the parties’ settlement of patent litigation and entry into contemporaneous business arrangements. Although the FTC reversed the findings of its own administrative law judge, the U.S. Court of Appeals for the Eleventh Circuit vacated the FTC’s decision and unanimously held that the final patent settlement agreement complied with the antitrust laws. Schering-Plough Corp. v. FTC, 402 F.3d 1056 (11th Cir. 2005). The Eleventh Circuit sits in Atlanta, Georgia, and the U.S. District Court for the Northern District of Georgia is located within the Eleventh Circuit. Since 2005, the Eleventh Circuit’s Schering-Plough decision has been followed by numerous federal circuit and district courts, including by the Second Circuit in In re Tamoxifen Citrate Antitrust Litigation, 466 F.3d 187 (2d Cir. 2006), and by the Federal Circuit in In re Ciprofloxacin Hydrochloride Antitrust Litigation, 544 F.3d 1323 (Fed. Cir. 2008). No federal court has adopted the FTC’s view of final pharmaceutical patent settlements.
