Loestrin 24 Generic Pay-for-Delay Suit Tossed Out

A federal judge has tossed out all claims in a consolidated class-action antitrust lawsuit alleging that brandmaker Warner Chilcott executed a “reverse payment” to generics firms Watson (now Actavis) and Lupin Pharmaceuticals to delay generic competition on its contraceptive Loestrin 24.

In his Sept. 4 dismissal, the Rhode Island federal judge cited the U.S. Supreme Court’s 2013 FTC v. Actavis decision, which says that cash needs to have traded hands in order to win a pay-for-delay lawsuit brought against brand and generics makers.

Because no money was ever exchanged in the case of Loestrin 24 (ethinyl estradiol/norethindrone acetate), the judge said he had no choice but to dismiss the claims.

Plaintiffs in the suit, including employee welfare benefit programs that paid for the drug, alleged that Warner Chilcott enticed the generics firms to settle the patent infringement suits by offering benefits such as licensing rights to other products and a promise not to produce its own authorized version of the birth control pill. The plaintiffs argued that a delay of generic Loestrin until at least 2014 had forced them to pay far more for the branded version.

While such enticements have a monetary impact, the judge said, it’s difficult to nail down a precise dollar amount.

The judge found that the lawsuit had adequately pled violation of antitrust law, but it was not enough, he said. Under the Supreme Court precedent, “non-cash pay for delay arrangements are likely to evade [antitrust] scrutiny so long as pharmaceutical companies take the obvious cue to structure their settlements in ways that avoid cash payments,” he said.

Congressional lawmakers have sought to undo the FTC v. Actavis precedent in a bill currently before the House judiciary committee.

Warner Chilcott was bought by Actavis in Oct. 2013. Neither Actavis nor Lupin responded to a request for comment by press time. — Bryan Koenig

Originally appeared in Drug Industry Daily, the pharmaceutical industry’s number one source for regulatory news and information. Click here for more information.