March 26, 2018 / 2:13 PM / a year ago

Impax settles retailers' antitrust cases over generic drug's delay

BOSTON, March 26 (Reuters) - Impax Laboratories Inc has reached a mid-trial settlement with retailers including CVS Health Corp and Rite Aid Corp who accused the drugmaker of entering into an anticompetitive deal to delay launching a generic, cheaper version of acne medication Solodyn.

The deal, disclosed in papers filed in federal court in Boston on Sunday, resolved only part of the litigation now entering its third week of trial. Impax still faces claims by a class of consumers and insurers.

The settlement resolved claims by retail pharmacy operators including CVS, Rite Aid, Walgreens Boots Alliance Inc, Kroger Co, Albertsons Companies Inc and HEB Grocery Company LP. Terms were not disclosed.

Impax, which in October agreed to combine with Amneal Pharmaceuticals LLC, did not respond to a request for comment on Monday. Lawyers for the retailers either declined to comment or did not respond to requests for comment.

The trial is one of a handful to have taken place since the U.S. Supreme Court in 2013 said so-called “pay-for-delay” settlements resolving pharmaceutical patent lawsuits can violate antitrust laws.

The settlements occur when a brand-name drugmaker pays a generic rival to delay releasing a cheaper version of its product in exchange for resolving court challenges to patents covering the treatment.

According to the plaintiffs, Impax in 2008 settled a lawsuit it filed challenging a weak patent Medicis Pharmaceutical Corp held for Solodyn by agreeing to delay releasing its generic version until 2011.

In exchange, Impax received $40 million, allowing Medicis to maintain its Solodyn monopoly longer, the plaintiffs allege. But for that settlement, Impax would have launched its generic version “at-risk” while the litigation continued, they say.

Impax’s lawyers have denied that there was any such arrangement to delay competition.

They note the U.S. Food and Drug Administration did not approve Impax’s drug until after the settlement in February 2009 and say its deal with Medicis allowed it to release a generic version before its patent expired in February 2018.

“How can that be delayed entry?” Douglas Baldridge, a lawyer for Impax, asked in his opening statement on March 12.

Jurors will only determine liability, leaving damages to be decided at a future trial.

Impax previously agreed to pay $35 million to resolve claims by a class of retailers and wholesalers.

Valeant Pharmaceuticals International Inc, which in 2012 acquired Medicis, in February said it would pay $58 million to resolve related claims. (Reporting by Nate Raymond in Boston Editing by Susan Thomas)

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