Takeda, Endo reaped 'many hundreds of millions' through Amitiza pay-for-delay deal, lawsuit claims

For years, branded drugmakers have used settlements with generics companies to extend market exclusivity. These “pay-for-delay” deals are often criticized as anti-competitive, and now Takeda and Endo are facing scrutiny for their prior accord.

A patent settlement between Takeda and Par Pharmaceutical—now part of Endo—in 2014 delayed generics to Japanese pharma’s constipation drug Amitiza and broke antitrust law, a new proposed class-action lawsuit claims.

The deal allowed the two companies to “maintain a monopoly” for Amitiza and effectively put off generic competition to the drug by several years, the plaintiff alleged in Massachusetts federal court. The two reaped “many hundreds of millions of dollars” in profits during the period, while patients paid “far more” than they should because of high prices, the lawsuit says.

Takeda holds commercial rights to Amitiza through a licensing deal with Sucampo Pharmaceuticals, which is now part of Mallinckrodt Pharmaceuticals. In late 2012, Par alerted Sucampo that it was seeking FDA approval for a generic version and was hoping to sell its copycat once a key patent expired in 2014.

Takeda soon brought a lawsuit against the generic company alleging infringement on six patents. The two settled the case in the fall of 2014. Under the deal, Par promised to delay selling a knockoff—whether made by itself or an authorized generic provided by Takeda—until 2021. Par also agreed to pay a royalty on its profits.

RELATED: California bans pharma's infamous 'pay-for-delay' deals

Because Par was the first generic to seek approval, the Takeda agreement delayed not just Par’s version but all copycats, the complaint said. Under FDA regulations, the first-to-file generic enjoys a six-month exclusivity during which time no other generic player may enter the market.

Takeda later reached separate settlements with several other generic filers, pushing back their launches to 2023. This means Takeda effectively gave Par two years of exclusivity as the only Amitiza generic on the market in exchange for Par delaying the launch, the civil suit said.

RELATED: Impax in hot water for 'pay-for-delay' deal on Endo painkiller Opana ER, feds say

It's not among the industry's bestselling medicines, but Amitiza has been an important product for Takeda. For the fiscal year ended in March, Takeda reported Amitiza sales of JPY 21.2 billion ($191 million), down about 25% from JPY 28.1 billion ($253 million) during the prior year.

While not uncommon, pay-for-delay deals between pharma companies have come under scrutiny in recent years. In 2019, California became the first state to ban the practice.

One estimate by the U.S. Federal Trade Commission (FTC) says the deals result in about $3.5 billion in overspending on drugs each year.

Separately, the FTC is suing Endo over another pay-for-delay deal. The antitrust agency says Endo violated the antitrust laws by canceling a generic to its own pain drug Opana ER through a profit-sharing deal with Impax Laboratories, which is now part of Amneal Pharmaceuticals, in 2017.