Announced Actions for April 2, 2004

Commission filing of complaint, stipulation, and judgment: The Commission has filed in Federal court its complaint, stipulation, and agreed-to judgment against RHI AG (RHI) to resolve charges that RHI violated various provisions of an FTC order issued in 2001. Under the terms of the settlement, RHI has agreed to pay a civil penalty of at least $650,000 for the violations and to conduct asbestos remediation at a divested plant, substantially beyond the remediation required in the original order.

On February 19, 2004, the Commission announced that it had reached a settlement with RHI, and had modified the agency’s order. Pursuant to the settlement filed in court this week, RHI will pay a civil penalty of $650,000 within 30 days after entry of judgment by the court. In addition, RHI will perform specified asbestos remediation at a plant divested to Resco Products, Inc., located in Marelan, Quebec, Canada. Depending on the final cost of this remediation, the consent judgment may require RHI to pay an additional civil penalty of up to $350,000 after the remediation is complete.

The FTC filed the complaint, stipulation, and consent judgment in the United States District Court for the District of Columbia. As previously announced, the Commission vote to accept the settlement, and to notify the Department of Justice of its intention to file the settlement, was 5-0. (FTC File No. 021-0105, Docket No. C-4005; the staff contact is Daniel P. Ducore, Bureau of Competition, 202-326-2526.)

Commission approval of amended complaint: The Commission has authorized the staff to seek leave to file an amended complaint in the matter currently pending against A. Glenn Braswell, et al. The FTC’s original complaint in this matter alleged that the defendants, among other things, made false and unsubstantiated efficacy and establishment claims for a variety of diet supplements. Through the action announced today, the FTC has added six defendants to the complaint – three corporate defendants: Hasley Holding LLC; Health Quest Publications, Inc.; and G.B. Data Systems of Canada; and three individual defendants: Dr. Ronald Lawrence; Dr. Hans Kugler; and Chase Revel. The Commission vote authorizing the staff to file the amended complaint was 5-0. (FTC File No. X030059, Civ No. CV 03-3700-DT (PJWx) (C.D. Cal.); the staff contact is Rosemary Rosso, Bureau of Consumer Protection, 202-326-2174; see press release dated May 27, 2003.)

Commission authorization of amicus brief filing: The Commission has authorized the staff to file an amicus curiae brief in Teva Pharmaceuticals USA v. Pfizer, Inc., Case No. 04-1186. The case, which is currently pending in the U.S. Court of Appeals for the Federal Circuit, is a Hatch-Waxman Act pharmaceutical action between the two companies related to Teva’s proposed generic version of Pfizer’s blockbuster antidepressant Zoloft. The Commission’s brief was filed in support of Teva, which is seeking the reversal of a district court order dismissing its declaratory judgment against Pfizer.

In dismissing Teva’s complaint, the district court ruled it lacked subject matter jurisdiction over Teva's action. Unless the court of appeals reverses that decision, Teva will not be able to get FDA approval for its application to market its generic version of Zoloft until 180 days after the first generic applicant, Ivax Pharmaceuticals, Inc., enters the market with its version of the drug. The case is significant, the FTC contends, because the rule of law it establishes likely will determine the extent to which brand-name drug manufacturers and first generic applicants can delay the entry of lower-cost generic versions of brand-name drugs by “parking” the limited 180-day exclusivity period granted a generic first applicant under the Hatch-Waxman Act.

The FTC’s brief explains that declaratory actions by subsequent generic companies (such as Teva) play a vital role in the Hatch-Waxman regime by providing these applicants with the opportunity to eliminate bottlenecks that can delay them from obtaining FDA approval to market their product. It then presents a two-pronged argument supporting jurisdiction over Teva’s case, stressing the Commission’s particular expertise in competition issues concerning the operation of the Hatch-Waxman Act, and specifically citing the issuance of the Commission’s Generic Drug Study, issued in July 2002.

The brief, which is available on the FTC’s Web site as a link to this press release, also discusses the implications of the district court’s decision for future suits by subsequent generic applicants. If affirmed, the FTC states, the district court’s holding would permit the examples of “parking” identified in the Generic Drug Study to delay the entry of generic products, possibly for a matter of years. The Commission vote authorizing the staff to file the amicus brief was 4-0, with Commissioner Pamela Jones Harbour recused. (FTC File No. P042112; staff contacts are Lore Unt, Division of Health Care Services and Products, 202-326-3019; and Lawrence DeMille-Wagman, Office of General Counsel, 202-326-2448).

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP