Schering-Plough Corporation, Upsher-Smith Laboratories, and American Home Products Corporation, In the Matter of

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In the Matter of Schering-Plough Corporation, Upsher-Smith Laboratories, and American Home Products Corporation.
FTC Matter/File Number:

9910256

Docket Number:

9297

Enforcement Type:

Part III Administrative Complaint

Case Summary

The United States Court of Appeals for the Eleventh Circuit set aside and vacated the Commission decision that found that Schering-Plough entered into agreements with Upsher-Smith Laboratories, Inc. and American Home Products to delay the entry of generic versions of Schering’s branded K-Dur 20, a prescribed potassium chloride supplement. The Commission filed a petition for writ of certiorari with the U.S. Supreme Court in August 2005, arguing that the lower court failed to recognize how some agreements limiting entry during the term of a patent can still be improper; the decision jeopardizes particularly important consumer interests; and the court of appeals misapplied the substantial evidence standard of review. The Supreme Court denied the petition. In the complaint dated March 30, 2001 the Commission alleged that Schering - Plough, the manufacturer of K-Dur 20 - a prescribed potassium chloride, used to treat patients with low blood potassium levels - entered into anticompetitive agreements with Upsher-Smith Laboratories and American Home Products Corporation to delay their generic versions of the K-Dur 20 drug from entering the market. According to the charges, Schering-Plough paid Upsher- Smith $60 million and paid American Home Products $15 million to keep the low-cost generic version of the drug off the market. The charges against American Home Products were settled by a consent agreement. An initial decision filed July 2, 2002 dismissed all charges against Schering - Plough and Upsher-Smith Laboratories. On December 8, 2003 the Commission reversed the administrative law judge’s initial decision that had dismissed all charges. The Commission found that Schering-Plough Corporation entered into agreements with Upsher-Smith Laboratories, Inc. and American Home Products to delay the entry of generic versions of Schering’s branded K-Dur 20. According to the opinion, the parties settled patent litigation with terms that included unconditional payments by Schering in return for agreements to defer introduction of the generic products. The Commission entered an order that would bar similar conduct in the future.

Case Timeline

January 22, 2002

January 16, 2002