FTC Says That Sanofi-Aventis and Other Companies Failed to Disclose Drug Pacts Relating to Sanofi’s Insomnia Drug Ambien

May 10, 2011

The Federal Trade Commission on May 10 announced that Sanofi-Aventis U.S. LLC, Synthon Holding B.V., and Watson Pharmaceuticals Inc., failed to inform antitrust authorities about agreements reached relating to patent infringement litigation over generic versions of Sanofi’s insomnia drug Ambien CR.

However, for several reasons, including that there was no harm to consumers or competition, the agency decided not to pursue enforcement action and instead sent the companies advisory letters as a way of ensuring future compliance and providing guidance to the pharmaceutical industry.

In a press release, the FTC said its Bureau of Competition notified Sanofi-Aventis, Watson Pharmaceuticals, Inc., and Synthon Holding B.V., of the belief that they violated the requirements of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). Under the MMA, brand name and generic drug companies must file drug patent agreements with the FTC and U.S. Department of Justice within 10 business days when the agreement involves a drug for which the generic has submitted the Abbreviated New Drug Application containing a “Paragraph IV” certification claiming that patent the asserted to cover the brand drug is either invalid or not infringed by the generic applicant. The failure to file timely drug patent agreements can result in a civil penalty of up to $11,000 for each day that a required filing has not been made.

While believing that the law was violated, the FTC chose not to recommend enforcement and decided to issue  advisory letters to the companies. The Bureau of Competition provided the following rationale for its decision in this case:

• the companies’ failure to file does not appear to have harmed consumers or competition, nor benefitted the companies;
• the failure to file does not appear to have been a deliberate effort on the part of the companies to evade the requirements of the MMA; and
• guidance to the industry via the advisory letters may serve a broader enforcement purpose.

“The Bureau of Competition recognizes the importance of clear guidance concerning the types of agreements that are subject to the MMA filing requirement,” said Bureau of Competition Director Richard Feinstein. “We expect that these companies, and the pharmaceutical industry more broadly, will closely consider the contents of these advisory letters in connection with future agreements that may be subject to the MMA.  We will consider enforcement recommendations, including appropriate penalties, in the future when the MMA filing requirements have not been met.”

Read the FTC’s letter Sanofi-Aventis’s counsel, Helene D. Jaffe, of Weil, Gotshal & Manges, New York.

Read the FTC’s letter to Synthon Holding’s counsel, E. Anthony Figg, of Rothwell, Figg, Ernst & Manbeck, Washington, D.C.