Pay-for-Delay: Antitrust Class Action Claims Takeda Paid to Keep Generic IBS Drug Off the Market

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A proposed class action alleges Takeda and Par Pharmaceutical violated federal antitrust law when the two struck an agreement to keep the latter’s generic version of Amitiza, an anti-constipation drug, off the market for up to six years. 

The 72-page complaint alleges Takeda’s “pay for delay” deal with Par in late 2014 served to preserve Amitiza’s monopoly, the profits from which the case says were shared among the two companies. The agreement between Takeda and Par delayed not only Par’s entry into the generic market for the drug, which is taken to help treat irritable bowel syndrome (IBS) and constipation from opioid use, but the entry of all generics for years, the case claims. 

“At least six companies filed applications to market and sell generic Amitiza,” the lawsuit, filed in Massachusetts federal court on June 25, states. “But by regulation, no other generics could enter before Par, as the first generic to seek approval.” 

According to the suit, no other Amitiza generics will enter the market before January 2023. 

The U.S. Food and Drug Administration first approved Amitiza in 2006, and by 2010 Par became the first to ask the agency for approval to sell a generic version, the lawsuit says. After the FDA accepted Par’s application, Takeda and collaborator Sucampo, who originally created the drug and held its patents, immediately sued for alleged patent infringement, triggering a 30-month stay of approval for the first Amitiza generic, the case relays. 

The case between Takeda/Sucampo and Par was ultimately settled, the complaint continues. But the purported “deal” that squashed the litigation ultimately came in the form of a disguised “reverse payment agreement” whereby Par, as the generic manufacturer, agreed to delay market entry and abandon its challenges to some of Takeda/Sucampo’s patents, the lawsuit says.According to the lawsuit, Takeda’s “payment” to Par came in the form of a “de facto, extra-long no-authorized-generic (‘no AG’) agreement,” which guaranteed to restrict competition once Par’s generic hit the market and ensured the company could charge higher prices than it would with more competitors on the market. 

Specifically, Par received in exchange for agreeing to stay off the market until January 2021 Takeda and Amitiza NDA holder Sucampo’s assurance that they would not launch an authorized generic version for at least another year and a half after the no-AG period, which typically lasts for six months, the case relays. Once Par was able to enter the market, it would pay Takeda a declining royalty on its gross profits from the sales of generic Amitiza based on the number of other generic market entrants, according to the suit.  

“While Takeda and its collaboration partner Sucampo technically reserved the ability to launch their own authorized generic product, the economics created by the structure of the agreement ensured that both the brand companies and Par would be better off if Takeda never launched an [authorized generic] to compete with Par’s launch,” the suit says. “Whether Par marketed its own [abbreviated new drug application] generic Amitiza or an [authorized generic] Amitiza provided by Takeda, all of the defendants would be better off with no additional generic competition.”

Per the suit, Takeda’s no AG payment to Pay was worth “at least $29 million and as much as $280 million,” far more than the company would have earned had it prevailed in patent litigation. 

The complaint contends that proposed class members—all persons and entities in the U.S. and its territories who directly purchased Amitiza and its generics in any form from January 1, 2016 through when “the effects of the defendants’ conduct cease”—would have been able to buy Amitiza’s generic equivalent earlier and for far less money had Takeda and Par “resolved their dispute without a payment.” Instead, buyers have paid “many hundreds of millions of dollars in overcharges,” the case claims. 

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