WASHINGTON Endo International Plc (ENDP.O) said on Monday it has reached a proposed settlement with U.S. antitrust regulators under which it will not pay rivals to delay the introduction of generic competitors to its medications.
The Federal Trade Commission had alleged Endo paid Impax Laboratories Inc (IPXL.O) to delay the introduction of a generic version of its painkiller Opana ER.
The agency also alleged Endo paid Watson Laboratories Inc to delay introduction of a generic version of its Lidoderm pain treatment. The proposed settlement must be ratified by a court.
Endo said it is not required to make any monetary payment to the FTC and made no admission of liability. It said the settlement is "consistent with the company's position that the Lidoderm and Opana ER settlements fully complied with the law both at the time they were executed and today."
Watson and Impax were also named in the FTC's lawsuit, which alleges the companies illegally blocked access to low-cost alternatives to Endo's products. The complaint against those companies remains outstanding.
Watson, which was formerly owned by Allergan Plc (AGN.N), is now owned by Teva Pharmaceutical Industries Ltd (TEVA.TA). Teva and Allergan declined to comment. A spokesman for Impax was not immediately reachable.
U.S. Senator Amy Klobuchar, a Democrat, and Republican Senator Chuck Grassley said in a statement that they have introduced legislation, "Preserve Access to Affordable Generics Act," to crack down on such arrangements.
The FTC's actions "are an important step in ending pay-off agreements that allow drug manufacturers to rake in huge profits while keeping cheaper generic drugs off the market," Klobuchar said.
Grassley added that drug companies are still entering into agreements to stall drug competition, "leaving consumers to pay higher prices for prescription medications."
Branded drugs typically lose up to 90 percent of their market share once a generic comes onto the market.
The FTC's complaint states that in 2011, Endo generated more than $825 million, or 30 percent of its total revenue, from Lidoderm, a pain patch. To stave off a generic threat from Watson, Endo provided payments and incentives worth $250 million, according to the complaint.
The FTC is seeking an order permanently barring the companies from engaging in similar behavior and "disgorgement of the defendants' ill-gotten gains."
The FTC alleges Endo paid Impax more than $112 million to delay the introduction of Opana ER.
(Additional reporting by Diane Bartz in Washington; Editing by Bernard Orr and Matthew Lewis)