DC appeals court dismisses FTC case against Endo and Impax’s opioid agreement

The US Court of Appeals for the District of Columbia Circuit on Friday dismissed a case brought by the Federal Trade Commission against Endo Pharmaceuticals and Impax Laboratories, affirming a lower court ruling that rejected the commission’s claims that the competitor companies created an exclusionary agreement around the opioid Opana ER (oxymorphone extended release).

The court ruled that the 2017 agreement between Endo and Impax is nothing more than a standard exclusive license and that the FTC failed to explain how the companies engaged in anticompetitive conduct.

George Gordon

“The D.C. Circuit’s ruling is particularly significant in an antitrust enforcement environment that has become increasingly hostile to, and suspicious of, the exercise of patent rights,” said George Gordon, a partner in Dechert’s antitrust group who, along with Julia Chapman, argued the appeal on behalf of Endo. “In affirming dismissal of the FTC’s case, the appellate panel confirmed the boundary between antitrust enforcement and the legitimate exercise of patent rights. As the court explained, the use of such patent rights does not violate the antitrust law unless it restrains trade beyond what is permitted by the Patent Act or existing precedent.”

Opana ER generated nearly $160 million in 2016 revenues. But in June 2017, the FDA asked Endo to voluntarily withdraw its drug from the market because of safety concerns related to potential abuse around the reformulated version of Opana ER that Endo launched in 2012. A month after FDA’s ask, Endo withdrew the drug. But then a month later, in August 2017, Endo reached an agreement with Impax to share Impax’s monopoly profits for the only other authorized oxymorphone ER product.

The FTC in 2021 alleged that Endo and Impax took advantage of that monopoly via the agreement, saying the withdrawal of Endo’s drug left Impax’s generic version of the original formulation of Opana ER as the only extended-release oxymorphone drug on the market.

But the appeals court ultimately said that the FTC complaint “lacks allegations establishing that the 2017 Agreement created anticompetitive effects greater than that authorized by settled law and precedent.”

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