P&G/Watson Macrobid "Authorized" Generic Launch Prompts Mylan Lawsuit
This article was originally published in The Pink Sheet Daily
Executive Summary
The practice of a branded company "authorizing" a generic misleads consumers and undercuts Waxman/Hatch incentives, Mylan says. Watson launched its generic one day after Mylan received ANDA approval and began marketing nitrofurantoin under 180 days of exclusivity.
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Mylan is challenging the legitimacy of "authorized" generics in a lawsuit over Procter & Gamble's Macrobid . FDA approved Mylan's ANDA for nitrofurantoin on March 22. The company was the first to file a Paragraph IV certification and is entitled to 180 days of generic marketing exclusivity for the anti-infective. However, Watson launched an authorized generic March 23 under a supply agreement with P&G. Mylan sued Watson and P&G in San Francisco state court March 23 arguing that the arrangement between the licensing partners "contravenes the pro-competitive purposes" behind the 180-day exclusivity period. "The arrangement...undermines the Hatch-Waxman legislation, which provides an incentive and various rights to a company that successfully challenges patents," Mylan said in a press release. "In addition to undermining the 180-day exclusivity provision of the law, this practice of a branded company 'authorizing' a generic is completely misleading to consumers." "Branded companies are utilizing a surrogate to sell their branded product at a lower price, while the branded company continues to sell the same product at a higher price. Consumers and third-party payors who are not aware of this practice and buy the branded product at the branded price are paying more than they should," Mylan said. Mylan's nitrofurantoin launched at an average wholesale price of $203.70 for 100 tablets; Watson's generic is priced at $203.61, according to Price Alert. The generics represent a 10% discount to P&G's price of $226.48. Mylan filed the 1 complaint on behalf of itself and "the general public." The lawsuit seeks declaratory and injunctive relief, as well as restitution to consumers and third-party payors for the difference in price between the branded and authorized generic products. Mylan has become increasingly aggressive in challenging authorized generic deals. The company filed a citizen petition in February requesting FDA bar authorized generics from entering the market during another company's 180-day exclusivity period. - Adam Eckstein |