Pharmaceutical Companies Settle FTC Charges of an Illegal Agreement not to Compete, which Resulted in Higher Prices for Generic Version of ADHD Drug

Pharmaceutical companies Concordia Pharmaceuticals Inc. and Par Pharmaceutical, Inc. have settled FTC charges that they entered into an unlawful agreement not to compete in the sale of generic versions of Kapvay, a prescription drug used to treat Attention Deficit Hyperactivity Disorder. As part of the settlement, the companies agreed not to enforce the anticompetitive provisions of their agreement.

Until May 15, 2015, Concordia and Par were the only two firms permitted by the FDA to market generic Kapvay. Rather than competing against one another, Concordia agreed not to sell an authorized generic version of Kapvay in exchange for a share of Par’s revenues. 

“By signing this agreement not to compete shortly before Concordia’s patent covering branded Kapvay ended, Concordia and Par reduced the number of competing generic Kapvay products available to consumers, depriving consumers of the lower prices that typically occur with generic competition,” said Debbie Feinstein, Director of the FTC’s Bureau of Competition.

Under the terms of the settlements, Concordia is prohibited from enforcing the anticompetitive provisions of its agreement with Par, including the profit-sharing provisions, and Par is prohibited from enforcing provisions that bar Concordia from agreeing not to sell an authorized generic version of Kapvay. Concordia began selling generic Kapvay after learning of the FTC’s investigation.

Also, in accordance with the proposed orders, Concordia and Par: 

• are prohibited from agreeing with other entities to bar or delay entry of an authorized generic after the patents covering the branded product have expired.
• are required to provide notice to the FTC of any patent settlement they make that restricts entry of an authorized generic drug; and
• must establish a compliance program for employees who are in a position to violate the order’s provisions, and must submit the required reports.

Details about the case are set forth in the analysis to aid public comment for this matter.

The Commission vote to issue the complaint and accept the proposed consent orders for public comment was 5-0. The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through September 17, 2015, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice. 

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000 per day.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., NW, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.