February 2, 2009 / 6:13 PM / 10 years ago

UPDATE 1-U.S. regulators challenge AndroGel patent pacts

WASHINGTON, Feb 2 (Reuters) - Federal and state regulators have challenged agreements made by Solvay SA (SOLB.BR) with generic drug companies Watson Pharmaceuticals Inc WPI.N, Par Pharmaceuticals PRX.N and Paddock Laboratories to delay their production of a cheaper version of Solvay’s drug AndroGel.

The Federal Trade Commission, or FTC, filed suit last week along with California regulators in the U.S. District Court for the Central District of California alleging the settlements violated antitrust law, according to a court filing.

The Belgian drugmaker Solvay and California-based Watson both said they would fight the suit and argued that the patent settlements were legal.

“Solvay Pharmaceuticals is aware of the claim, and the company intends to use all means to defend the validity of the settlements,” said Solvay spokesman Erik de Leye.

Watson said the settlement provided for generic versions of AndroGel to be sold five years before the patent expired.

“We are disappointed that the FTC has decided to challenge our patent settlement, as we believe the agreement fully complies with both the spirit and letter of the antitrust and consumer protection laws,” Watson Chief Executive Paul Bisaro said in a statement.

FTC Commissioner Jon Leibowitz, who is the driving force at the FTC in opposing the patent settlements, said the issue was “going to be a continued emphasis for the coming months and years.”

“This is yet another deal that turns competition on its head,” said Leibowitz, who estimated the deals cost AndroGel users “hundreds of millions” of dollars during the nine years that generic entry into the market would be delayed.

Court documents put Solvay’s U.S. AndroGel revenues at “over $400 million” in 2007.

Solvay had sued generic drugmaker Watson, claiming that Watson’s generic version of AndroGel infringed Solvay’s patent.

Under their patent settlement, Solvay granted Watson a nonexclusive license to the U.S. patents covering AndroGel, and Watson agreed not to start selling its generic product until August 2015 or until another company started selling a generic version.

Solvay made a similar settlement with Par, which had been partnered with Paddock. Under the pact, it also was allowed to market the generic version of AndroGel in August 2015. (Reporting by Diane Bartz; Editing by Phil Berlowitz)

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