Novartis to Pay $245M to Settle Pay-for-Delay Lawsuit

The Swiss pharma giant Novartis will in total pay $245 million in separate settlements with direct purchasers, indirect purchases, and retailers. Novartis has been accused of colluding with Endo’s Par Pharmaceutical to delay the launch of a generic version of Exforge, Novartis’ high blood pressure medicine.

The settlements will “resolve all outstanding claims” related to the Exforge case, Novartis said in a statement, pending approval by a federal judge in New York.

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This particular litigation began way back in 2018 and concerns an agreement between Novartis and Par which was signed in 2011. In the deal, Par agreed to wait until September 2014 — more than two years after the expiration of a patent — to launch a generic version of Exforge. Novartis, in return, agreed not to launch an authorized generic of Exforge during a 180-day period of exclusivity that had been granted to the Par version by the FDA as the first copycat of the high blood pressure drug.

According to plaintiffs, this so-called “pay-for-delay” agreement violated federal antitrust laws and resulted in them paying more for brand and generic Exforge than they otherwise would have. Without the deal, Par would have launched its generic as early as September 2012, when the patent expired, or March 2013 at the latest, when the generic got its final FDA approval, the plaintiffs argued.

Novartis did not admit to any wrongdoing in a public settlement agreement with the direct purchasers and denied the allegations made by the plaintiffs.

Pay-for-delay deals are not uncommon in the biopharma industry, nor are lawsuits challenging their legality. For instance, last year, AbbVie paid $54 million to settle pay-for-delay claims regarding its Alzheimer’s disease drug Namenda, while AstraZeneca is currently fighting a similar claim around its antipsychotic Seroquel XR, and Par was one of the defendants in a separate lawsuit over Takeda’s constipation drug Amitiza.

This most recent settlements will allow Novartis to focus on its current business and put some of its legacy problems behind it, the company said in a statement.

But this is just the latest of several large settlements Novartis has agreed to in recent in years, with 2020 being particularly difficult for the company.

That year, it agreed to a $729 million settlement to end litigation alleging that it offered kickbacks to doctors to boost prescription of its drugs (including Exforge) using sham speaker programs and events; it paid $347 million and admitted to bribing doctors in several countries under the U.S. Foreign Corrupt Practices Act; and it paid $195 million as part of an industrywide generics price-fixing scheme that also implicated several other companies, including Teva, Mylan, and several Indian generic drugmakers.