The US Federal Trade Commission is taking Solvay and generic drugmakers Watson and Par to court for keeping cheaper copycat versions of the Belgian group’s flagship product AndroGel off the market.

The lawsuit alleges that Solvay paid the generic drugmakers to stop them from launching their own cheaper versions of the testosterone gel, which makes annual sales of over $400 million a year, in return for a share of the profits, which the FTC considers to be anticompetitive behaviour.

According to the complaint, filed in the US District Court for the Central District of California, back in 2003 Watson and Par each sought regulatory approval to sell generic versions of AndroGel on the basis that their products did not infringe Solvay’s patent. The FTC alleges that, in 2006, Solvay, “realising the devastating effect generic entry would have on its AndroGel franchise, acted unlawfully to eliminate this threat” by offering to pay the generic companies to drop their patent challenges and keep copycat versions off the market for nine years until 2015, five years before the patent is due to expire.

“At a time of escalating health care costs, these unlawful agreements deny patients the benefit of competition between branded and generic pharmaceuticals and ultimately cost consumers hundreds of millions of dollars a year,” said Acting FTC Bureau of Competition Director David Wales, commenting on the lawsuit.

And in a separate statement, FDA Commissioner Leibowitz said the case is “yet another example of pharmaceutical companies turning competition on its head…Congress enacted the landmark 1984 Hatch-Waxman Act to encourage early generic entry and save consumers money, but these anticompetitive deals threaten to destroy that benefit and make crucial portions of the Hatch-Waxman Act extinct in all but name.”

Settlement court approved
But Par Pharmaceuticals points out that its 2006 settlement with Solvay was entered and approved by the US District Court for the Northern District of Georgia, which described the settlement as “a good faith final settlement agreement”. Furthermore, it says, the court’s Consent Judgment added that the agreement allowed the companies “opportunity to more productively use money and other resources that would have been spent in the continued prosecution and defence of this litigation, to the benefit of the parties and consumers alike.”

And Paul Bisaro, Watson's President and Chief Executive Office, said his company is “disappointed” with the FTC’s move, as it believes the agreement “fully complies with both the spirit and letter of the antitrust and consumer protection laws, as interpreted by numerous appellate courts throughout the US”.

According to Bisaro, the settlement with Solvay “promotes competition and confers a meaningful benefit to US consumers by providing for, among other things, the entry of a generic version of AndroGel five years prior to the expiration of [its] patents”, and he said that Watson intends to “vigorously defend” itself over the matter.