FTC reaches global ‘pay-for-delay’ settlement with Teva; Aceto files for bankruptcy

By PharmaCompass

2019-02-28

Impressions: 129 Article

In the US, the Federal Trade Commission (FTC) has reached a global settlement with Teva Pharmaceutical over charges that its agreements with rivals impeded consumer access to lower-priced generic drugs.

If approved by the various courts, the stipulated order will prohibit Teva from engaging in reverse-payment patent settlement agreements that impede consumer access to lower-priced generic drugs.

Known as pay-for-delay, such deals have long irked federal officials and lawmakers, and the FTC has been working to get tough on the arrangements in recent years. In 2015, the agency secured a massive US$ 1.2 billion settlement with Teva’s Cephalon unit over delays to narcolepsy drug Provigil. Teva paid up the US$ 1.2 billion to the federal government, but now the government says that settlement didn’t go far, and the parties returned with an expanded arrangement designed to keep Teva from working the same type of arrangement from another angle.

This time, Teva won’t hand over any cash in the new settlement but will be barred from entering into the “two most pernicious and common forms of reverse payments,” the FTC said, including commitments to not compete against authorized generics. The newer settlement also prohibits “side deals,” or payments to generics companies around the time of a resolution of a patent case.

Meanwhile, Aceto Corporation has entered into a “stalking-horse” asset purchase agreement (an attempt by a bankrupt company to test the market for its assets) with an affiliate of New Mountain Capital, a growth-oriented investment firm with over US$ 20 billion in assets under management, to sell its chemicals business assets for gross proceeds of US$ 338 million in cash, plus the assumption of certain liabilities and subject to certain adjustments, on a cash-free and debt-free basis.

The sale will be conducted under the US Bankruptcy Code. Aceto also faces delisting of its stock from the Nasdaq stock market. Aceto was notified on Thursday by Nasdaq that “trading of the company’s common stock…will be suspended at the opening of business on Monday, March 4.” Aceto said it would appeal to the Nasdaq Listing Qualifications Hearing Panel to “stay the suspension of the company’s common stock”.

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