BOSTON, March 12 (Reuters) - Impax Laboratories Inc went to trial on Monday over claims by major retailers and consumers that the company agreed to delay launching a generic version of Solodyn in exchange for millions of dollars from the acne medication’s manufacturer.
Jury selection began in Boston federal court in a case centered on an alleged “pay-for-delay” settlement, in which a generic manufacturer agrees to resolve legal challenges to a brand-name drug’s patents and delay making a cheaper version.
The trial is one of a handful to have taken place since the U.S. Supreme Court in 2013 said that such settlements, which also involve brand-name drug companies paying the generic manufacturers, can be found to be anticompetitive.
The case is being pursued by a class of consumers and third-party insurers and by several retailers, including CVS Health Corp, Walgreens Boots Alliance Inc and Rite Aid Corp.
They allege Impax in 2008 received $40 million from Medicis Pharmaceutical Corp plus $23 million in “milestone” payments after agreeing to drop an appeal of a ruling dismissing a lawsuit that Impax filed that sought to invalidate a Solodyn patent.
While Hayward, California-based Impax received U.S. Food and Drug Administration approval for its generic version of Solodyn in February 2009, the settlement allowed Impax to instead begin selling the drug in November 2011, the plaintiffs allege.
They contend that, but for the settlement, Impax would have launched its generic version “at-risk” while the litigation was continuing. Impax denies that allegation.
Impax, which in October agreed to combine with Amneal Pharmaceuticals LLC, denies wrongdoing and contends that its deal with Medicis did not delay competition.
The trial came after Impax on Saturday reached a deal to resolve part of the litigation it faced over Solodyn, agreeing to pay $35 million to resolve claims by a class of direct purchasers such as retailers and wholesalers.
Valeant Pharmaceuticals International Inc, which in 2012 acquired Medicis, in February said it would pay $58 million to resolve related claims against it.
The trial is expected to last four weeks. Jurors will be asked only to determine liability because damages will be determined at a later trial.
Lawyers for the consumers and insurers have said they were overcharged by up to $790.3 million and that the defendants were unjustly enriched by up to $803.3 million, according to an October court ruling.
Under federal antitrust law, any damages would be tripled.
The case is In re Solodyn (Minocycline Hydrochloride) Antitrust Litigation, U.S. District Court, District of Massachusetts, No. 14-md-02503. (Reporting by Nate Raymond in Boston; editing by Jonathan Oatis)