Geneva Pharmaceuticals, Inc..

9810395

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS:: Robert Pitofsky, Chairman; Sheila F. Anthony; Mozelle W. Thompson; Orson Swindle; Thomas B. Leary

In the Matter of

GENEVA PHARMACEUTICALS, INC. ) a corporation.

DOCKET NO. C-3946

DECISION AND ORDER

The Federal Trade Commission ("Commission"), having initiated an investigation of certain acts and practices of Abbott Laboratories ("Abbott") and Geneva Pharmaceuticals, Inc. (hereinafter referred to as "Respondent Geneva"), an indirect wholly-owned subsidiary of Novartis Corporation, and Respondent Geneva having been furnished thereafter with a copy of a draft complaint which the Bureau of Competition proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge Respondent Geneva with violation of the Federal Trade Commission Act; and

Respondent Geneva and counsel for the Commission having thereafter executed an Agreement Containing Consent Order, an admission by Respondent Geneva of all the jurisdictional facts set forth in the aforesaid draft complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by Respondent Geneva that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission's Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that Respondent Geneva has violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, and having duly considered the comments filed by interested persons pursuant to Section 2.34 of its Rules, now in further conformity with the procedure described in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Geneva Pharmaceuticals, Inc., an indirect wholly-owned subsidiary of Novartis Corporation, is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Colorado, with its office and principal place of business located at 2555 W. Midway Blvd., Broomfield, Colorado 80020.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of Respondent Geneva, and the proceeding is in the public interest.

ORDER

IT IS ORDERED that for the purposes of this order, the following definitions shall apply:

A. "Respondent Geneva" means: (1) Geneva Pharmaceuticals, Inc., and its successors and assigns; (2) any entity that the parent of Geneva Pharmaceuticals, Inc. controls and that engages in the manufacture or sale of Drug Products in the United States for which it is, or becomes, an ANDA First Filer; (3) any predecessor, subsidiary, division, group and affiliate controlled by the entities described in subparagraphs (1) and (2) above that engages in the manufacture or sale of Drug Products in the United States for which it is, or becomes, an ANDA First Filer; (4) successors and assigns of the entities described in subparagraphs (2) and (3) above that are or become ANDA first filers; and (5) the respective directors, officers, employees, agents and representatives of each acting in their capacities as such.

B. "Commission" means the Federal Trade Commission.

C. "180-day Exclusivity Period" means the period of time established by Section 505(j)(5)(B)(iv) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 355(j) et seq.).

D. "Agreement" means anything that would constitute an agreement under Section 1 of the Sherman Act or Section 5 of the Federal Trade Commission Act.

E. "ANDA" means an Abbreviated New Drug Application, as defined under 21 U.S.C. § 355(j) et seq.

F. "ANDA First Filer" means the party whom the FDA determines is entitled to, or eligible for, a right to a 180-day Exclusivity Period which has not yet expired.

G. "Control" has the same meaning as the definition of the term in 16 C.F.R. § 801.1(b).

H. "Drug Product" means a finished dosage form (e.g., tablet, capsule, or solution) that contains a drug substance, generally, but not necessarily, in association with one or more other ingredients, as defined in 21 C.F.R. § 314.3(b).

I. "FDA" means the United States Food and Drug Administration.

J. "NDA" means a New Drug Application, as defined under 21 U.S.C. § 355(b) et seq.

K. "NDA Holder" means: (1) the party that received FDA approval to market a Drug Product pursuant to an NDA; (2) a party owning or controlling enforcement of the patent(s) listed in the Approved Drug Products With Therapeutic Equivalence Evaluations (commonly known as the "FDA Orange Book") in connection with the NDA; or (3) the predecessors, subsidiaries, divisions, groups and affiliates controlled by the entities described in subparagraphs (1) and (2) above, as well as the entities' licensees, successors and assigns.

L. "Parent" has the same meaning as "ultimate parent entity" in 16 C.F.R. § 801.1(a).

M. "Person" means both natural persons and artificial persons, including, but not limited to, corporations, unincorporated entities, and governments.

N. "Relinquishing" means transferring, selling, assigning, waiving, or relinquishing.

II.

IT IS FURTHER ORDERED that Respondent Geneva cease and desist, either directly or indirectly, in connection with the sale of Drug Products in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44, from being a party to any Agreement in which one party is an NDA Holder for a Drug Product(s), any other party is the ANDA First Filer for the Drug Product(s), and:

A. the ANDA First Filer is prohibited by such Agreement from relinquishing, or is subject to a penalty, forfeiture, or loss of benefit if it relinquishes, its right to the 180-Day Exclusivity Period; or

B. the ANDA First Filer agrees to refrain from researching, developing, manufacturing, marketing, or selling any Drug Product that could be approved for sale by the FDA pursuant to the ANDA and that is not the subject of a court action alleging patent infringement.

Provided, however, that nothing in this Paragraph II shall prohibit Agreements involving the complete transfer of rights in a Drug Product.

III.

IT IS FURTHER ORDERED that, in any instance where Respondent Geneva is a party to a patent infringement action in which it is either the NDA Holder or the alleged infringer, it shall cease and desist, either directly or indirectly, in connection with the sale of Drug Products in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44, from being a party to any Agreement in which the parties do not agree to dismiss the litigation, and in which the NDA Holder provides anything of value to the alleged infringer and the alleged infringer agrees to refrain during part or all of the course of the litigation from selling the Drug Product at issue, or any Drug Product containing the same chemical entity(ies) at issue. Notwithstanding the above, however, such an Agreement is permissible when entered into in conjunction with a joint stipulation between the parties that the court may enter a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure, if: (1) together with the stipulation for a preliminary injunction, Respondent Geneva provides the court with the proposed Agreement, as well as a copy of the Commission's complaint, order, and Analysis to Aid Public Comment in this matter; (2) Respondent Geneva has provided Notification, as described in Paragraph V below, to the Commission at least thirty (30) days prior to submitting the stipulation for a preliminary injunction; (3) Respondent Geneva does not oppose any effort by the Commission to participate, in any capacity permitted by the court, in the court's consideration of any such action for preliminary relief; and (4) the court issues an order which incorporates the terms of the Agreement. Nothing in this Paragraph shall be interpreted to prohibit or restrict the right of Respondent Geneva to unilaterally seek relief from the court, without notice to the Commission, including, but not limited to, applying for preliminary injunctive relief or seeking to extend the 30-month stay pursuant to 21 U.S.C. § 355(j)(4)(B)(iii).

IV.

IT IS FURTHER ORDERED that Respondent Geneva shall provide Notification as described in Paragraph V below to the Commission at least thirty (30) days before entering into, enforcing, or otherwise participating in any Agreement made after the date the Agreement Containing Consent Order is signed whereby an ANDA First Filer agrees with an NDA Holder to refrain from selling any Drug Product under its ANDA for any period of time.

The Notification required by Paragraphs III and IV shall be filed with the Secretary of the Commission and shall include the following information, to the extent known, and not subject to any legally recognized privilege: (1) identification of the parties involved in the Agreement; (2) identification of all Drug Products involved in the Agreement; (3) identification of all persons who have filed an ANDA with the FDA (including the status of such application) for any Drug Product containing the same chemical entity(ies) as the Drug Product(s) involved in the Agreement; (4) a copy of the proposed Agreement; (5) identification of the court, and copy of the docket sheet, for any legal action which involves either party to the Agreement and relates to any Drug Product(s) containing the same chemical entity(ies) involved in the Agreement; and (6) all documents which were prepared by or for any officer(s) or director(s) of Respondent Geneva for the purpose of evaluating or analyzing the Agreement.

VI.

IT IS FURTHER ORDERED that, within ten (10) days of signing the Agreement Containing Consent Order in this matter, Respondent Geneva shall notify the FDA in writing that Respondent Geneva is relinquishing any and all eligibility for, and entitlement or right to, a 180-day Exclusivity Period for ANDA No. 74-315 (terazosin HCL tablets).

VII.

IT IS FURTHER ORDERED that Respondent Geneva shall file a verified written report within sixty (60) days after the date this order becomes final, annually thereafter for five (5) years on the anniversary of the date this order becomes final, and at such other times as the Commission may by written notice require, setting forth in detail the manner and form in which Respondent Geneva intends to comply, is complying, and has complied with this order. Respondent Geneva shall include in its compliance reports, among other things that are required from time to time, a full description of the efforts being made to comply with this order.

VIII.

IT IS FURTHER ORDERED that Respondent Geneva shall notify the Commission at least thirty (30) days prior to any proposed change in Respondent Geneva such as dissolution, assignment, sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in Respondent Geneva that may affect compliance obligations arising out of this order.

IX.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this order and subject to any legally recognized privilege, and upon written request with reasonable notice to Respondent Geneva, Respondent Geneva shall permit any duly authorized representative of the Commission:

A. Access, during office hours and in the presence of counsel, to all facilities, and to inspect and copy all books, ledgers, accounts, correspondence, memoranda, calendars, and other records and documents in its possession or under its control relating to compliance with this order; and

B. To interview officers, directors, employees, agents, and other representatives of Respondent Geneva, who may have counsel present, regarding such compliance issues.

IT IS FURTHER ORDERED that this order shall terminate on May 22, 2010.

By the Commission.

Donald S. Clark
Secretary

SEAL:

ISSUED: May 22, 2000