U.S. Court of Appeals for the Fifth Circuit Upholds FTC’s Opinion against Generic Pharmaceutical Company Impax Laboratories, LLC

The U.S. Court of Appeals for the Fifth Circuit has upheld the Federal Trade Commission’s determination that Impax Laboratories, LLC engaged in an illegal pay-for-delay, or “reverse payment,” settlement to block consumers’ access to a lower-cost generic version of Endo Pharmaceuticals Inc.’s branded extended-release opioid pain reliever Opana ER. Under the settlement, Impax agreed to stay out of the market for two-and-a-half years in exchange for a substantial and unjustified payment from Endo.

“There was more than enough evidence to support th[e] unanimous view of the Commissioners . . . that a less restrictive alternative was viable,” Judge Gregg Costa wrote in the Fifth Circuit’s opinion.  

“I am thrilled that the Fifth Circuit has upheld the FTC’s opinion that pay-for-delay deals in the pharmaceutical industry harm consumers and thwart lower-cost generic drugs,” said FTC Acting Chair Rebecca Kelly Slaughter. “This case is an important milestone in the decades of work by FTC staff to stop pay-for-delay agreements.”

The Commission’s opinion held that the FTC staff had proven that the agreement between Impax and Endo Pharmaceuticals Inc. violated Section 5 of the Federal Trade Commission Act. The Commission’s opinion reversed Chief Administrative Law Judge D. Michael Chappell’s initial decision.

The Commission’s final order bars Impax from entering into any type of reverse payment that defers or restricts generic entry, including no-Authorized Generic commitments, as well as certain business transactions entered with the branded pharmaceutical manufacturer within 45 days of a patent settlement. The order also bars Impax from entering any agreement with another oxymorphone ER manufacturer that prevents or restricts competition between oxymorphone ER products.

In January 2017, the FTC filed an administrative complaint against Impax, charging that in 2010, Impax and Endo Pharmaceuticals Inc. illegally agreed that Impax would not compete by marketing a generic version of Endo’s Opana ER until January 2013. In exchange, Endo paid Impax more than $112 million. Then again in January 2021, the Commission charged Endo and Impax, and Impax’s owner Amneal Pharmaceuticals, Inc. with illegally eliminating competition in the market for oxymorphone ER. That case is pending before the U.S. District Court for the District of Columbia.