FTC antitrust complaint against Impax Labs dismissed

In an Initial Decision announced on May 18, 2018, Chief Administrative Law Judge D Michael Chappell dismissed the antitrust charges in a complaint issued by the Federal Trade Commission against generic pharmaceutical company Impax Laboratories (Nasdaq: IPXL), which earlier this month completed its merger with Amneal Pharmaceuticals.

The FTC’s January 2017 administrative complaint alleged that, in June 2010, Impax and Endo Pharmaceuticals illegally agreed that Impax would refrain from marketing a generic version of Endo’s Opana ER – an extended-release opioid used to relieve moderate to severe pain – until January 2013. According to the administrative complaint, in exchange, Endo had paid Impax more than $112 million as of January 2017.

Judge Chappell concluded that Complaint Counsel failed to prove that the agreement between Impax and Endo violated Section 5 of the Federal Trade Commission Act. In particular, he found that under the facts of the case, “the magnitude and extent of any anticompetitive harm is largely theoretical, based on an inference that, absent the Challenged Agreement, Impax’ entry date, and therefore generic competition, would have been earlier than January 2013. The evidence shows that such earlier entry was unlikely.” He therefore concluded that the procompetitive benefits of the agreement outweighed the anticompetitive harm.