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FTC sues AbbVie, Teva over testosterone drug

The U.S. Federal Trade Commission sued drugmakers AbbVie and Teva Pharmaceuticals USA on Monday in federal court in Philadelphia, alleging that they harmed consumers and enhanced their profits by agreeing to delay selling a generic version of a billion-dollar testosterone-replacement drug.

A scene from a commercial for Androgel.
A scene from a commercial for Androgel.Read more

The U.S. Federal Trade Commission sued drugmakers AbbVie and Teva Pharmaceuticals USA on Monday in federal court in Philadelphia, alleging that they harmed consumers and enhanced their profits by agreeing to delay selling a generic version of a billion-dollar testosterone-replacement drug.

The AbbVie-Teva arrangement "forced consumers to overpay hundreds of millions for the drug AndroGel," FTC Chairwoman Edith Ramirez said, adding that she hoped the court would compel the companies to "disgorge their ill-gotten gains."

Teva, the world leader in generic-drug revenue, has several facilities in the region, including its Americas headquarters in Montgomery County. A Teva spokeswoman declined comment.

AbbVie spokesman Dirk Van Eeden declined comment on the lawsuit, but added, "Our patent infringement lawsuits were appropriate, and our settlement agreements were lawful, as well as in the best interest of all parties."

This was the first case filed by the FTC since a 2013 Supreme Court decision that supported the commission's attempts to limit so-called pay-for-delay agreements between branded and generic pharmaceutical companies. About 18 older cases are pending. The Supreme Court acted because the Philadelphia-based U.S. Court of Appeals for the Third Circuit ruled that all such agreements inherently violated antitrust laws, whereas other appellate courts had allowed many versions of pay-to-delay agreements. The high court said cases should be examined individually for violations of antitrust law.

AbbVie, which was formerly part of Abbott Laboratories and bought AndroGel in 2010, and its partner, Besins Healthcare Inc., filed a "sham" patent lawsuit against Teva and another generic company, Perrigo, in 2011 according to the FTC. Under FTC rules, that lawsuit automatically put a 30-month hold on Teva's application for approval of its generic version of AndroGel.

Teva then filed a countersuit. But the FTC said Teva discontinued its suit and delayed launching its generic version of AndroGel in exchange for a supply of a generic version of an AbbVie cholesterol drug, Tricor, which Teva could sell for greater profit. Ramirez said that giving Tricor to Teva made "no business sense," for AbbVie except as means of compensating Teva for not bringing its generic AndroGel to market and that "you don't need a pile of cash" to make such agreements inappropriate.

Speaking generally, Deborah Feinstein, director of the FTC's bureau of competition, reiterated what she said in 2013 when asked about penalties deterring drug companies.

"I said it would certainly be nice if one of these cases saw a settlement in the range of a billion dollars," Feinstein said, "because it would certainly give parties a reason to think twice" about entering into pay-to-delay deals.