Last week the FTC announced that it was closing its investigation of patent settlement agreements between Shire Laboratories, Barr Pharmaceuticals, and Impax Laboratories related to Adderall XR without taking action. Under the terms of the Shire-Barr agreement, Barr agreed not to offer a generic version of Adderall XR until April 2009 and Shire appointed Barr as the exclusive (even as to Shire) distributor of the Authorized Generic (“AG”) version of the drug for an undisclosed period of time, and as a non-exclusive distributor of the AG thereafter. It is worth noting that the FTC has characterized provisions like this one as a so-called “No-AG” agreement, and asserted that such provisions can constitute a form of payment from branded to generic manufacturers in the context of patent settlement agreements under Hatch-Waxman.
Given the FTC’s very recent amicus brief in In re Effexor, however, the closing of the Adderall XR investigation should not be taken as an indication that the agency is abandoning its scrutiny of these provisions. Instead, this development may suggest that the FTC is carefully weighing the fact that these types of provisions can vary significantly both in form and competitive effect.
Finally, it is important to note that the Adderall XR agreements are still the subject of private litigation currently pending in federal court in the Southern District of New York.