The state of California has filed a civil suit against units of drugmakers Teva (TEVA - Get Report) and Allergan (AGN - Get Report) , for allegedly obstructing generic competition to Lidoderm transdermal patches.
The suit, filed in federal court in San Francisco, alleges a "pay-for-delay" deal between the companies and Endo Pharmaceuticals, which already had its Lidoderm product on the market and had made $825 million off of it in 2011.
The alleged anti-competitive violations took place between 2012 and 2014.
According to the court records, Allergan signed an agreement with Endo Pharmaceuticals, promising that the company would not face any generic competition for Lidoderm from units of Allergan from May 2012 through September 2013 and in turn that Allergan would not face any competition from Endo until May 2014.
The lawsuit names Watson Laboratories, now a subsidiary of Teva, Allergan Finance, also known as Watson Pharmaceuticals Inc., and Activis Inc., as well as Allergan.
As noted in the lawsuit, Lidoderm is the brand name for lidocaine transdermal patches, often prescribed for treatment of pain associated shingles.
The action claims as a result of the agreement, consumers had to pay hundreds of millions of dollars in surpa-competitive prices for prescriptions of Lidoderm as well as AB-rate generic equivalents from May 2012 for two years. The suit documents state that such anticompetitive agreements "... lead consumers, payors and the State to pay, directly or indirectly, monopoly prices for Lidoderm medications and deny them the lower prices that generic competition provides."
The 10-count legal action asks the court to judge the agreement to be a violation of the Sherman act, constituting a restraint of trade, a conspiracy to monopolize trade, and those ill-gotten gains be disgorged, and that the defendant companies pay $2,500 for each violation proven at trial.
Neither Allergan nor Teva responded immediately to a request for comment on the action.