Ranbaxy Laboratories and Teva Pharmaceutical Industries have agreed to settle allegations by New York state that they broke the law by agreeing to restrict competition for sales of generic Lipitor.
Through their U.S. business units, Ranbaxy and Teva agreed to end a 2010 agreement by which they agreed not to challenge each other’s filings seeking six months of exclusivity for selling generic copies of branded drugs following the expiration of their patents. The companies agreed to pay $300,000 in fines, and to refrain from similar agreements in the future, though neither Ranbaxy nor Teva admitted nor denied the state’s claims.
“Agreements between drug manufacturers to protect each other’s market positions violate principles of antitrust law, and can lead to higher drug prices,” New York state Attorney General Eric Schneiderman said in a statement that also warned drug companies they "should be aware that my office will intervene aggressively to root out collusion among industry players."
Ranbaxy agreed to let Teva sell generic Lipitor after the Indian-based drug company owned by Daiichi Sankyo expressed concern it would not gain FDA approval quickly enough to start selling the drug late in 2011. Ranbaxy has come under repeated FDA scrutiny in recent years; last year the company agreed to pay a $500 million fine to settle federal civil and criminal allegations of safety and record-keeping violations. However, the agreement remained in effect even though Ranbaxy won FDA approval and was able to begin selling generic Lipitor.
According to Schneiderman, the settlement was the latest application of a June 2013 decision by the U.S. Supreme Court overturning a lower court’s shielding drug companies from liability in lawsuits for carrying out “pay for delay” agreements, in which they pay rivals to postpone competition for their branded drug from lower-cost generic versions.
The settlement and fines resolve a case opened by the state into an agreement by the companies relating to the generic version of Pfizer’s blockbuster cholesterol drug Lipitor, atorvastatin calcium. While the agreement related to the sale of only one drug, it included "no-challenge" commitments intended to protect dozens of each company’s drugs from legal and regulatory challenges by the other, Schneiderman’s office said.