Has the Federal Trade Commission overstepped its bounds? U.S. Judge Alan Kay suspects so, after hearing evidence in a legal fight over the FTC's probe into a generics deal between Watson Pharmaceutical and Cephalon.
The arguments stem from an FTC subpoena of Cephalon CEO Paul Bisaro. Bisaro has been fighting that subpoena since last year. But the fireworks started when Bisaro's lawyers accused FTC of trying to bully Watson into trading away its exclusivity on a copycat form of Cephalon's wakefulness drug Provigil. One FTC official went so far as to threaten an agency investigation if Watson didn't give its "first-to-file" rights to generics maker Apotex, court papers allege.
"The facts before us suggest that the FTC sought to place Watson between a rock and a hard place, where the only way Watson could clear its name and escape further FTC scrutiny was to give in to the pressure the FTC was placing on Watson to enter into the business deal with Apotex," Kay said. He also cited a "strong possibility" that FTC shared confidential information with Apotex.
The FTC has been aggressively investigating "pay-for-delay" deals in which branded drugmakers pay cash settlements to resolve patent disputes with generics makers, saying the arrangements keep copycat drugs off the market, costing the government and taxpayers billions. But did the agency get this aggressive? FTC officials deny wrongdoing, while the subpoena fight continues; Bisaro now has the right to get answers from the agency via written interrogatories.