(Reuters) - A U.S. judge on Friday found that pharmaceutical company AbbVie Inc used sham litigation to illegally prevent generic versions of testosterone replacement drug AndroGel from getting to market and ordered the drugmaker and its partner to pay $448 million.
The ruling by U.S. District Judge Harvey Bartle in Philadelphia came in an antitrust lawsuit filed in 2014 by the Federal Trade Commission against AbbVie and its partner Besins Healthcare Inc.
The decision followed a non-jury trial that tested the ability of the U.S. regulator to fight efforts by major pharmaceutical companies to prevent the sale of cheaper generic versions of their drugs.
“The FTC has established the actual market reality that defendants possessed monopoly power and illegally and willfully maintained that monopoly power through the filing of sham litigation,” Bartle wrote.
Chicago-based AbbVie did not respond to a request for comment, but it denied the allegations at trial. A lawyer for privately-held Besins had no immediate comment.
The FTC has long fought against so-called “pay for delay” settlements, in which a brand-name drugmaker pays a generic rival to delay releasing a cheaper version of its product in exchange for resolving patent lawsuits.
In its lawsuit, the FTC accused AbbVie and Besins of filing baseless patent infringement lawsuits in 2011 against generic drugmakers Teva Pharmaceutical Industries Ltd and Perrigo Company to delay the launch of their generic versions of AndroGel.
The regulator alleged that as part of that effort, AbbVie and Besins entered into a pay-for-delay settlement with Teva, which helped delay generic drug competition.
Bartle in his ruling agreed the lawsuits were baseless and said that absent the litigation and settlement agreements stuck in the cases, Perrigo would have released a generic version of AndroGel in June 2013 rather than December 2014.
The judge ordered the companies to pay $448 million, representing their profits from June 2013 to August 2017.
He apportioned liability between AbbVie and Besins according to their agreed royalty rates. According to the ruling, Besins received 8 percent of U.S. net sales of AndroGel through March 2015, at which point the rate dropped to 5 percent.
The FTC, which had sought $1.35 billion, said the order was the largest award ever in an antitrust case that it litigated in court.
“It sends a clear signal that pharmaceutical companies can’t use baseless litigation to forestall competition from low-cost generics,” FTC Chairman Joe Simons said in a statement.
Reporting by Nate Raymond in Boston; Editing by Richard Chang
Our Standards: The Thomson Reuters Trust Principles.