Video Testimony Proper In AndroGel Probe: DC Circ.

By Pete Brush

Law360, New York (October 23, 2009) -- A district court was right to order three current or former executives to give videotaped testimony to the Federal Trade Commission in its probe into whether pharmaceutical companies unlawfully delayed entry into the market of a generic version of the testosterone supplement AndroGel, a federal appeals court has ruled.

Friday's ruling in the U.S. Court of Appeals for the District of Columbia Circuit said the trio's objections to the June 2008 ruling in the U.S. District Court for the District of Columbia were "utterly without merit."

Although the depositions have been completed, the appellate court said Friday, the case was saved from mootness by the appellants' desire to have the tapes ordered destroyed, which the appellate court did not do.

The appellants, former Par Pharmaceutical Companies Inc. CEO Scott Tarriff, Par executive Paul Campanelli and Paddock Laboratories Inc. senior executive Edward Maloney, appealed from an order of the district court granting the agency's petition to enforce subpoenas requiring their testimony.

"Appellants’ sole basis for asserting the invalidity of the subpoenas is that the FTC proposed to record the testimony, not only by the stenographic method mandated in the commission’s rules, but also by videotape," the D.C. Circuit said Friday. "Finding this objection to be utterly without merit, the district court granted the petition for enforcement of the subpoenas. We agree and affirm."

The FTC is seeking to determine whether agreements among Unimed Pharmaceuticals Inc., Laboratories Besins Iscovesco and Solvay Pharmaceuticals Inc. — or any other agreements — delayed entry of generic AndroGel into the market in violation of federal laws.

In April 2008 the FTC filed its petition for an order enforcing the subpoenas.

According to court documents, Solvay's patented AndroGel drug had annual sales topping $350 million in 2007. Paddock developed a generic version of the drug and filed an abbreviated new drug application with the U.S. Food and Drug Administration in May 2003.

Paddock then joined with Par in a product developments and supply agreement concerning the generic product.

In August 2003 Solvay filed a patent infringement suit against Paddock in the U.S. District Court for the Northern District of Georgia. In September 2006 the parties entered into a settlement agreement under which Par and Paddock agreed to delay the marketing of their generic product.

On the same day, the parties entered into a transaction that provided for "substantial payments" from Solvay to Paddock and Par.

Those payments triggered the FTC probe, which is ongoing.

In May the FTC and three drug wholesalers representing buyers of the testosterone supplement filed amended complaints in their lawsuits claiming the AndroGel-related settlements violate antitrust laws.

Tarriff and the other appellants are represented by White & Case LLP.

Parties to the dispute could not immediately be reached for comment Friday.

The appeal is FTC v. Scott Tarriff et al., case number 08-5205, in the U.S. Court of Appeals for the District of Columbia Circuit.