FTC pushes Watson Pharma subpoena, denies information disclosure in ‘pay-for-delay’ case

FTC pushed Watson subpoena, denies info disclosure

NEW YORK — The Federal Trade Commission has accused Watson Pharmaceuticals Inc. of delaying an investigation into a potential “pay-for-delay” deal on a generic sleep disorder drug.

On Thursday, the FTC again requested the company comply with a subpoena for Watson CEO Paul Bisaro while denying it shared confidential information about the company with a third party. The dispute dates back more than two years to an FTC lawsuit against Cephalon Inc. on allegations that company paid off potential competitors to keep a cheaper versions of its sleep disorder drug Provigil off the market.

Watson said it can’t comment on ongoing litigation.

The FTC is concerned about whether Watson is currently purposely keeping a generic version of the drug off the market as part of a deal with Cephalon. It describes the settlement deals as “pay-for-delay” because generic companies are offered patent dispute settlements in return for delaying launch of a generic version of a drug.

The new legal filings from the FTC came on the same day Watson was named in a similar settlement deal with Forest Laboratories over the Alzheimer’s drug Namenda.

“The commission continues to stand behind its subpoena and its investigation,” the FTC said, in a statement Thursday. “The commission has substantial and legitimate concerns about these pay-for-delay agreements and their impact on consumers.”

Meanwhile, Watson has alleged that the FTC disclosed privileged information to Apotex and urged Watson to give up its exclusivity rights to a generic version of Provigil. Watson was the first to file for a generic version, giving it 180 days of market exclusivity after it launches. Other generic companies can not launch a version until that exclusivity expires.

The FTC denied the allegations, saying it needed to understand whether Apotex or others were blocked because of patent issues.

“Put simply, FTC staff was trying to assess whether a generic company was likely to have such information independently or whether such information was likely available to the generic only as a result of collusion with the brand company to create an additional barrier to impede potential generic entry,” the agency said, in a legal filing Thursday.

“The answers to these questions would influence the future of the ongoing investigation,” the FTC added.

Meanwhile, Watson’s generic version of the hypertension drug Toprol now faces more competition after drug developer Wockhardt received approval for its own version. The branded version is made by Novartis. The new generic could pose a threat to Watson’s market share.

Watson shares fell $2.04, or 4.7 percent, to $41.50 in afternoon trading Friday. The stock has traded between $33.48 and $44.97 over the last 52 weeks.