Impax reaches $20 million deal to end trial over generic drug’s delay

BOSTON (Reuters) – Impax Laboratories Inc has agreed to pay $20 million to consumers and insurers to resolve claims that the drugmaker entered an anticompetitive deal to delay launching a generic, cheaper version of acne medication Solodyn.

The accord, disclosed in papers filed in federal court in Boston, brought to an end a rare trial in a class action lawsuit involving an alleged “pay-for-delay” patent litigation settlement between a brand-name drugmaker and a generic company.

Such settlements occur when a brand-name drugmaker pays a generic rival to delay releasing a cheaper version of its product in exchange for resolving court challenges to patents covering the treatment.

According to the plaintiffs, Impax in 2008 settled a lawsuit it filed challenging a weak patent Medicis Pharmaceutical Corp held for Solodyn by agreeing to delay releasing its generic version until 2011.

In exchange, Impax received $40 million, allowing Medicis to maintain its Solodyn monopoly longer, the plaintiffs allege. But for that settlement, Impax would have launched its generic version “at-risk” while the litigation continued, they say.

Lawyers for Hayward, California-based Impax have denied that there was any such arrangement to delay competition.

Thursday’s settlement came in the third week of the trial and after the plaintiffs earlier this week finished presenting their evidence against Impax, which in October agreed to combine with Amneal Pharmaceuticals LLC.

“It’s a fair result,” Douglas Baldridge, a lawyer for Impax, said outside of court.

The deal marked the latest, and final, settlement in the litigation. Impax previously agreed to pay $35 million settlement to resolve class action claims brought on behalf of direct purchasers of Solodyn such as retailers and wholesalers.

Mid-trial, Impax also on Sunday reached a deal to resolve lawsuits by retail pharmacy operators including CVS, Rite Aid, Walgreens Boots Alliance Inc, Kroger Co, Albertsons Companies Inc and HEB Grocery Company LP. Terms were not disclosed.