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On April 13, 2021, the U.S. Court of Appeals for the Fifth Circuit issued an opinion in
Impax Laboratories, Inc v. Federal Trade Commission, affirming the Federal Trade Commission's (FTC) unanimous decision that Endo Pharmaceuticals, Inc.'s settlement with Impax Laboratories, Inc. constituted a reverse payment and violated Section 5 of the FTC Act. In so doing, the Fifth Circuit reiterated the rule-of-reason burden-shifting framework for reverse payment cases, and also granted considerable deference to the FTC.
Background and Procedural History
In the underlying patent litigation, Endo Pharmaceuticals, Inc. (Endo) sued first-filer Impax Laboratories, Inc. (Impax) in 2008. At that time, Endo planned to introduce a new crush-resistant formulation of Opana ER (extended-release oxymorphone) and allegedly wanted to delay Impax's generic entry until after the new formulation launched. In June 2010, right before the patent trial was about to begin, Impax agreed to enter the Opana ER market in January 2013 and, in exchange: 1) Endo agreed not to launch an authorized generic ("no-AG" agreement) during the first 180 days after Impax's launch; 2) Impax would receive a portion of sales for the original Opana ER if sales fell below a certain amount; 3) Endo granted Impax a license to future patents for extended-release oxymorphone; and 4) the parties entered into a collaboration agreement for a new Parkinson's treatment, where Endo paid $10 million immediately and up to $30 million more based on certain milestones. After this settlement, Endo introduced its new formulation and paid Impax $102 million in credits. Ultimately, Endo voluntarily withdrew the new formulation due to safety concerns raised by the U.S. Food and Drug Administration (FDA), leaving Impax's generic Opana ER as the only oxymorphone ER product on the market.