Pfizer Inc. (PFE), Merck & Co. (MRK) and 35 other pharmaceutical companies have asked a federal judge to block the release of confidential documents detailing drug-patent litigation settlements, which Cephalon Inc. (CEPH) has requested as part of an antitrust dispute with the government.
Pfizer, Merck and the other companies say the settlement documents were submitted to the U.S. Federal Trade Commission under laws designed to ensure they would remain confidential.
"Disclosure of these settlement agreements and related documents in this matter would seriously damage the third parties' business and legal interests," the companies wrote in a motion filed this week in federal court in Philadelphia.
The FTC in December notified several drug makers that the commission could be forced to disclose the documents as a result of Cephalon's request.
Cephalon had asked Judge Mitchell Goldberg last month to order the FTC to release the documents, saying it needs them to mount a defense against an FTC lawsuit that seeks to clear the way for generic competition for the company's top-selling drug, narcolepsy treatment Provigil.
The FTC sued Cephalon in 2008, accusing it of buying off four generic-drug manufacturers including Teva Pharmaceutical Industries Ltd. (TEVA, TEVA.TV) in settlements of patent-infringement litigation surrounding Provigil, which generates roughly half of Cephalon's revenue.
The patent settlements, in which Cephalon paid a total of $200 million to the generics manufacturers, forestalled competition from cheaper copycats of Provigil until 2012.
The drug generated $828 million in sales for the first nine months of 2010; full-year results haven't been reported. The FTC has asked a federal judge in Philadelphia to overturn the settlements, arguing they are anticompetitive. Private drug buyers also have sued Cephalon, which has denied the allegations.
The suit against Cephalon is part of the FTC's multiyear campaign against what it calls "pay-for-delay" deals, in which makers of brand-name drugs effectively pay generics manufacturers not to launch cheaper copycat versions until a later date. The commission argues such deals are anticompetitive and deprive consumers and drug-benefit plans of cheaper options.
The drug industry argues patent-litigation settlements are permitted by law, and sometimes provide for the availability of generic drugs before scheduled patent expirations for brand-name drugs. Appellate courts have upheld the deals in recent years despite the FTC's position.
Cephalon, of Frazer, Pa., says that in the course of the litigation, the FTC has cited conclusions from two reports it has published on patent settlements, including one issued a year ago that estimated drug buyers would save about $3.5 billion annually if Congress banned pay-for-delay deals. The study was based on patent-settlement agreements companies filed with the FTC between 2004 and 2009, as required by law.
In 2008, Pfizer reached a patent settlement with generics manufacturer Ranbaxy Laboratories Ltd. (500359.BY), granting Ranbaxy a license to sell generic versions of blockbuster cholesterol drug Lipitor beginning in November 2011. Ranbaxy had previously tried to overturn key U.S. patents for Lipitor in an effort to sell generic copies sooner. However, Pfizer and Ranbaxy have said their agreement didn't contain any payments that would run afoul of the FTC, and the commission hasn't publicly challenged the deal.
Cephalon wants Judge Goldberg to either bar the FTC studies from being used in the case or to compel the FTC to turn over documents supporting the studies.
The FTC said in a court document this week that it has no intention of offering the studies into evidence. The commission objects to the release of the confidential agreements, saying they are irrelevant to the case and protected from disclosure by law. Cephalon has countered that the documents would only be disclosed to the judge and parties to the case for use in the litigation.
An FTC spokesman declined to comment.
Spokesmen for Merck and Cephalon couldn't immediately be reached. A Pfizer spokesman declined immediate comment.
-Peter Loftus, Dow Jones Newswires; +1-215-656-8289; firstname.lastname@example.org
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