FTC supports generic Mylan in Philly suit against branded Warner Chilcott

The Federal Trade Commission filed an amicus brief Tuesday in federal court in Philadelphia that was supportive of an antitrust lawsuit filed by Mylan Pharmaceuticals of Canonsburg, Pa., against Warner Chilcott Plc, which is registered in Ireland but has headquarters in the North Jersey town of Rockaway.

Mylan filed suit in July, alleging that Warner Chilcott was illegally interfering with Mylan's attempts to sell its generic version of antibacterial drug Doryx, which is made by Warner Chilcott. Three class action suits were also filed against Warner Chilcott.

Mylan is saying that Warner Chilcott offered only slightly different - but no better - versions of its drug to perpetuate its rights to exclusivity.

Mylan wants treble damages, which happen in antitrust suits, punitive damages and attorneys fees.

Warner Chilcott says in SEC filings that it will defend itself.

A link to the original complaint is here.

On Monday, Warner Chilcott filed a 19-page motion asking federal judge Paul Diamond to deny the FTC attempt to join the discussion, basically saying this case was none of the FTC's business.

Diamond had not ruled as of Wednesday morning.

A link to the full FTC amicus brief is here. The top of it reads as follows:

"Competition from lower-priced generic drugs saves American consumers billions of dollars a year. These consumer savings, however, mean lower profits for brand drug companies. It is well-established that when generic entry occurs, the brand drug company suffers a rapid and steep decline in sales and profits. The threat of generic competition thus creates a powerful incentive for brand companies to protect their revenue streams. This incentive can prompt brand companies to create innovative new products that offer medical benefits to patients. But it may also drive brand companies to seek to obstruct generic drug competition by making modest product reformulations that offer patients little or no therapeutic advantages.

"Such tactics, often referred to as product-switching or product-hopping, can be an effective way to game the regulatory structure that governs the approval and sale of generic drugs, thereby frustrating the efforts of federal and state policymakers to facilitate price competition in pharmaceutical markets. As discussed below, a brand company can interfere with the mechanism by which generic drugs compete by making modest non-therapeutic changes to its product, and effectively prevent generic competition, not because the reformulated product is preferred by consumers, but simply because it is different.

"Plaintiffs allege that Warner Chilcott engaged in a pattern of product-switching, introducing three successive product reformulations that, according to their complaints, offered little or no apparent medical benefit to consumers. Each reformulation, plaintiffs allege, was designed to, and did, impede meaningful generic competition and preserve Warner Chilcott’s monopoly profits not on the merits of the reformulations, but by manipulating the pharmaceutical regulatory system. Warner Chilcott has moved to dismiss the complaints, asserting that the introduction of a new product is essentially per se legal. While courts are properly cautious when confronting antitrust challenges to new product introductions, “[j] udicial deference to product innovation ... does not mean that a monopolist’s product design decisions are per se lawful.”