Impax Beats the Rap Over Generic Drug Pact

Impax Laboratories Inc. has beaten the antitrust rap—for now.

The generic drug company escaped the Federal Trade Commission’s antitrust claims against it in a case alleging the drug company entered into an illegal drug patent litigation settlement to keep a generic version of Endo Pharmaceuticals’ painkiller Opana ER off the market.

The ruling is a disappointment for the FTC, which had been hoping for a win in the case. The FTC is likely to appeal FTC Chief Administrative Law Judge D. Michael Chappell’s initial decision to the full commission.

“The decision is a setback for the FTC in an area that the commission has invested a lot of resources into over many years,” Alexis Gilman, a former FTC official now a partner with Crowell & Moring LLP’s antitrust group in Washington, told me. “For that reason alone, I think there’s a good chance that complaint counsel will appeal,” he said.

But Impax shouldn’t breathe easy just yet because “historically, the commission hasn’t been shy about reversing the ALJ,” Gilman said.

And all eyes will be on the commission’s handling of the appeal because the appeal will likely be heard by a commission made up of entirely new members. Its membership experienced almost complete turnover last month so it’s unclear how the newly appointed commissioners will approach the case.

“What’s interesting and different about this appeal of an ALJ decision is that this one will be heard by an almost entirely new commission from the one that voted out the complaint,” Gilman told me. “Only Commissioner [Maureen] Ohlhausen remains from the commission that voted out the complaint, while the other four commissioners will be more of a ‘clean slate’ when they hear this appeal.”

Usually, the commission that hears appeals is the same, or nearly the same, as that which voted out the complaint, he said.

“It will be the interesting to see what the new commission does—and how it’s thinking about these issues—in what may be the first big case it decides on appeal,” Gilman said.

Read my article here.

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