BOSTON (Reuters) - Impax Laboratories Inc went to trial on Monday over allegations by major retailers and consumers that the company agreed to delay launching a generic version of acne medication Solodyn in exchange for millions of dollars from the manufacturer.
The trial in Boston federal court is one of a handful to have taken place since the U.S. Supreme Court in 2013 said so-called “pay-for-delay” settlements resolving pharmaceutical patent lawsuits can violate antitrust laws.
The settlements occur when a brand-name drugmaker pays a generic rival to delay releasing a cheaper version of its product in exchange for resolving court challenges to patents covering the treatment.
A lawyer for Impax, in his opening statement, denied there was any such arrangement to delay Solodyn’s entry to the market.
Richard Arnold, a lawyer for the retailers, told jurors in his opening statement that Impax in 2008 settled a lawsuit it filed challenging a “weak” patent Medicis Pharmaceutical Corp held for Solodyn by agreeing to delay releasing its a generic version until 2011.
In exchange, Impax received $40 million, allowing Medicis to maintain its Solodyn monopoly longer, Arnold said.
“Instead of competing in the way we expect businesses to compete, they choose to pay off Impax to delay entry into the market for three years,” Arnold said.
He said but-for that settlement, Impax would have launched its generic version “at-risk” while the litigation continued.
But Douglas Baldridge, Impax’s lawyer, noted the U.S. Food and Drug Administration did not approve Impax’s drug until February 2009 post-settlement and that its arrangement with Medicis allowed it to release a generic version before Medicis’ patent expired in February 2018.
“How can that be delayed entry?” he asked.
The case is being pursued by a class of consumers, third-party insurers and by several retailers, including CVS Health Corp and Rite Aid Corp.
Jurors are being asked only to determine liability because damages will be determined at a later trial.
Impax on Saturday reached a deal to resolve part of the litigation it faced over Solodyn, agreeing to pay $35 million to resolve claims by a class of direct purchasers such as retailers and wholesalers.
Valeant Pharmaceuticals International Inc, which in 2012 acquired Medicis, in February said it would pay $58 million to resolve related claims against it.
Lawyers for the consumers and insurers have said they were overcharged by up to $790.3 million and that the defendants were unjustly enriched by up to $803.3 million, according to an October court ruling.
Under federal antitrust law, any damages would be tripled.
The case is In re Solodyn (Minocycline Hydrochloride) Antitrust Litigation, U.S. District Court, District of Massachusetts, No. 14-md-02503.
Reporting by Nate Raymond in Boston; editing by Jonathan Oatis and Grant McCool