COMPLAINT

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Markus H. Meier, D.C. Bar No. 459715 

Bradley S. Albert, Md. Bar 

Jamie R. Towey, D.C. Bar No. 475969 

Eric M. Sprague, N.Y. Bar 

Daniel W. Butrymowicz, N.Y. Bar 

Daniel S. Bradley, Tex. Bar No. 24074119 

Nicholas A. Leefer, Cal. Bar No. 286640 

600 Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 

(202) 326-3759; (202) 326-3384 (fax) 

mmeier@ftc.gov; balbert@ftc.gov; jtowey@ftc.gov; 

esprague@ftc.gov; dbutrymowicz@ftc.gov; dbradley@ftc.gov; nleefer@ftc.gov

Attorneys for Plaintiff Federal Trade Commission 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

 v. 

ALLERGAN PLC, 

ALLERGAN FINANCE LLC, 

WATSON LABORATORIES, INC., 

ENDO INTERNATIONAL PLC, 

and 

ENDO PHARMACEUTICALS INC., 

 Defendants.

Case No. 17-cv-00312

COMPLAINT FOR INJUNCTIVE AND

OTHER EQUITABLE RELIEF

Case 3:17-cv-00312-WHO Document 1 Filed 01/23/17 Page 1 of 27
COMPLAINT—PAGE 2 

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 Plaintiff, the Federal Trade Commission (“FTC”), by its designated attorneys, petitions 

this Court, pursuant to Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), for a permanent 

injunction and other equitable relief against Defendants Endo Pharmaceuticals Inc.; Endo 

International plc; Watson Laboratories, Inc.; Allergan Finance LLC (f/k/a Actavis, Inc., f/k/a 

Watson Pharmaceuticals, Inc.); and Allergan plc1; to undo and prevent their unfair methods of 

competition in or affecting commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. 

§ 45(a), and an acquisition in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. 

I. Nature of the Case 

1. This antitrust case challenges an anticompetitive reverse-payment agreement 

between Endo and Watson to obstruct lower-cost generic competition to Lidoderm, Endo’s most 

important branded prescription drug product. In 2011, Endo generated more than $825 million 

from Lidoderm, a lidocaine patch, comprising 30% of Endo’s total annual revenues. The threat 

of generic entry to Lidoderm posed significant financial risks for the company. Endo knew that 

generic competition would decimate its Lidoderm sales and that any delay in generic 

competition would be highly profitable for Endo, but very costly for consumers. 

2. By 2012, generic entry appeared imminent. Two-and-a-half years earlier, Watson 

Labs had submitted an application with the U.S. Food and Drug Administration to market a 

generic version of Lidoderm. Watson Labs asserted that Endo’s Lidoderm patent was invalid, 

unenforceable, or would not be infringed by Watson Labs’ generic version of Lidoderm. Watson 

publicly stated that it was preparing to launch its generic as early as the middle of 2012. 

3. Faced with Watson’s threat to its lucrative Lidoderm franchise, Endo bought off 

its potential competitor. In May 2012, Endo agreed to pay the Watson entities to abandon the 

patent challenge and forgo entry with a lower-cost generic version of Lidoderm for more than a 

 

1

 For convenience, Endo Pharmaceuticals Inc. and Endo International plc will be collectively 

referred to in this Complaint as “Endo.” Watson Laboratories, Inc. will be referred to as “Watson 

Labs.” Allergan Finance LLC, which was known as Watson Pharmaceuticals, Inc. in 2012 when 

the reverse-payment agreement with Endo was entered, will be referred to as “Watson Pharma.” 

Watson Labs, Watson Pharma, and Allergan plc will be collectively referenced as “Watson” or 

“the Watson entities.” 

Case 3:17-cv-00312-WHO Document 1 Filed 01/23/17 Page 2 of 27
COMPLAINT—PAGE 3 

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year, until September 2013. The payment to the Watson entities included two components. First, 

Endo guaranteed that Watson would receive supra-competitive profits by being the only seller of 

generic Lidoderm during at least the first 180 days—and up to the first 71⁄2 months—on the 

market. Even though Endo had the legal right and financial incentive to sell an authorized 

generic version of Lidoderm as soon as Watson entered with its generic product, Endo agreed to 

refrain from competing on generic Lidoderm for up to the first 71⁄2 months of Watson’s generic 

sales. This “no-AG commitment” was worth hundreds of millions of dollars to Watson. Second, 

Endo agreed to provide Watson Pharma with branded Lidoderm patches valued at $96 million to 

$240 million “at no cost,” which Watson Pharma’s wholly-owned distribution subsidiary, Anda, 

Inc., could sell for pure profit. In total, Endo’s payment to the Watson entities was worth at least 

$250 million. 

4. The purpose and effect of this anticompetitive agreement was to ensure that Endo 

would not face generic competition for Lidoderm until September 2013. As a result, patients 

were denied the opportunity to purchase lower-cost generic versions of Lidoderm, forcing them 

and other purchasers to pay hundreds of millions of dollars more for this medication. 

II. Jurisdiction and Venue 

5. This Court has subject matter jurisdiction over this action pursuant to 15 U.S.C. 

§§ 45(a) and 53(b), and 28 U.S.C. §§ 1331, 1337(a), and 1345. 

6. This Court has personal jurisdiction over each Defendant pursuant to 15 U.S.C. 

§ 53(b) and because each Defendant has the requisite constitutional contacts with the United 

States of America. 

7. Venue in this district is proper under 15 U.S.C. § 22 and 28 U.S.C. § 1391(b) and 

(c), and under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b). Each Defendant resides, 

transacts business, committed an illegal or tortious act, is found in this District, or is otherwise 

subject to the Court’s personal jurisdiction with respect to this action. 

8. Defendants’ general business practices and the unfair methods of competition 

alleged herein are “in or affecting commerce” within the meaning of Section 5 of the FTC Act, 

15 U.S.C. § 45, and as defined in Section 1 of the Clayton Act, 15 U.S.C. § 12. 

Case 3:17-cv-00312-WHO Document 1 Filed 01/23/17 Page 3 of 27
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9. Defendant Watson’s acquisition of an exclusive field-of-use license constitutes an 

acquisition subject to Section 7 of the Clayton Act, 15 U.S.C. § 18. 

10. Each Defendant is, and at all times relevant herein has been, a corporation, as 

“corporation” is defined in Section 4 of the FTC Act, 15 U.S.C. § 44. 

III. The Parties 

11. Plaintiff Federal Trade Commission (“FTC”) is an independent administrative 

agency of the United States Government, established, organized, and existing pursuant to the 

FTC Act, 15 U.S.C. § 41 et seq., with its principal offices in Washington, D.C. The FTC is 

vested with authority and responsibility for enforcing, inter alia, Section 5 of the FTC Act, 

15 U.S.C. § 45, and is authorized under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), to 

initiate court proceedings to enjoin violations of any law the FTC enforces and to seek equitable 

monetary remedies. 

12. Defendant Endo Pharmaceuticals Inc. is a for-profit Delaware corporation, with 

its principal place of business at 1400 Atwater Drive, Malvern, Pennsylvania 19355. Endo 

Pharmaceuticals is engaged in the business of, among other things, developing, manufacturing, 

and marketing branded and generic pharmaceutical products. Endo Pharmaceuticals entered into 

the anticompetitive agreement challenged in this complaint. 

13. Defendant Endo International plc is the parent company of Endo Pharmaceuticals 

Inc. Endo International is a for-profit Ireland corporation, with its global headquarters at 1st 

Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland, and its U.S. 

headquarters in Malvern, Pennsylvania. Endo International had $2.9 billion in revenues in 2014. 

At the time of the anticompetitive Opana ER agreement challenged in this complaint, Endo 

Pharmaceuticals Holdings Inc. was the parent of Endo Pharmaceuticals Inc. By the time of the 

anticompetitive Lidoderm agreement challenged in this complaint, Endo Pharmaceuticals 

Holdings Inc. was doing business as Endo Health Solutions Inc. The corporate officers of the 

parent entity negotiated and approved the Opana ER and Lidoderm agreements and the president 

signed them. Through a series of name changes, acquisitions, and corporate restructurings, Endo 

Health Solutions Inc. is now doing business as Endo International plc. 

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14. Defendant Watson Laboratories, Inc. is a for-profit Nevada corporation, having its 

principal place of business at 575 Chipeta Way, Salt Lake City, Utah 84108. At the time of the 

anticompetitive agreement challenged in this complaint, Watson Labs was engaged in 

developing, manufacturing, marketing, and distributing branded and generic pharmaceutical 

products. Watson Labs signed the anticompetitive agreement concerning Lidoderm challenged in 

this complaint on behalf of the Watson entities. As of August 2016, Watson Labs is a subsidiary 

of Teva Pharmaceutical Industries Ltd. 

15. Defendant Allergan Finance LLC (f/k/a Actavis Inc. and f/k/a Watson 

Pharmaceuticals, Inc.) is a for-profit Nevada corporation, having its principal place of business at 

Morris Corporate Center III, 400 Interpace Parkway, Parsippany, New Jersey 07054. At the time 

of the anticompetitive agreement challenged in this complaint, Allergan Finance LLC was 

known as Watson Pharmaceuticals, Inc. and was engaged in developing, manufacturing, 

marketing, and distributing branded and generic pharmaceutical products, among other things. 

The corporate officers of Watson Pharma negotiated the anticompetitive agreement, including 

substantial provisions directly benefitting Watson Pharma, and Watson Pharma’s chief legal 

officer signed the agreement. In this and other ways discussed in this complaint, Watson Pharma 

was a direct participant in, and beneficiary of, the unlawful conspiracy with Endo. 

16. Defendant Allergan plc (f/k/a Actavis plc) is a for-profit Ireland corporation, with 

its corporate headquarters at Clonshaugh Business and Technology Park, Coolock, Dublin, D17 

E400, Ireland. Allergan plc was created through an all-stock transaction when Actavis, Inc. 

purchased Warner Chilcott plc and effected a corporate inversion to change its domicile to 

Ireland for tax purposes. When this occurred in 2012, ownership interests in Actavis, Inc. were 

transferred to Allergan plc, and substantially the same management team continued the same 

business under the newly created entity. There is no indication that Actavis, Inc. was provided 

any consideration as part of this transaction. Although its corporate headquarters are in Ireland, 

Allergan plc’s operational headquarters are in Parsippany, New Jersey, where Actavis, Inc. was 

headquartered prior to the creation of Allergan plc. Most—if not all—of Allergan plc’s 

management team live in the New York/New Jersey area and work at the 

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New Jersey location, which Allergan describes in its public filings as the company’s 

“administrative headquarters.” Indeed, Allergan is expanding its footprint in New Jersey to 

further consolidate “key functions of our organization into a single location.” Allergan plc is the 

parent company of Allergan Finance, LLC (formerly Actavis, Inc.). Paul Bisaro, currently 

Allergan plc’s Executive Chairman, approved the Lidoderm agreement at issue in the action on 

behalf of the Watson entities. In recent years, Allergan plc has exercised control over Allergan 

Finance LLC—including causing the transfer of many branded and generic pharmaceutical 

products from Allergan Finance LLC to other Allergan plc subsidiaries without any known 

consideration to Allergan Finance LLC—such that Allergan plc and Allergan Finance LLC have 

a unity of interest. Because transfers of assets such as this could defeat remediation obtained 

against Allergan Finance LLC, an inequitable result would occur if Allergan plc were found to 

be separate from Allergan Finance LLC for the purpose of this action. 

IV. Background 

A. Federal law facilitates approval of generic drugs 

17. The Federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 301 et seq., as 

amended by the Drug Price Competition and Patent Term Restoration Act of 1984 (the “HatchWaxman Act”) and the Medicare Prescription Drug, Improvement, and Modernization Act of 

2003, 21 U.S.C. §§ 355(b)(2) and 355(j) and 35 U.S.C. § 271(e), establishes procedures designed 

to facilitate competition from lower-priced generic drugs, while maintaining incentives for 

pharmaceutical companies to invest in developing new drugs. 

18. A company seeking to market a new pharmaceutical product must file a New 

Drug Application (“NDA”) with the U.S. Food and Drug Administration (“FDA”) demonstrating 

the safety and efficacy of the new product. These NDA-based products generally are referred to 

as “brand-name drugs” or “branded drugs.” 

19. The FDA requires NDA holders to identify any patents that an NDA holder 

believes reasonably could be asserted against a generic company that makes, uses, or sells a 

generic version of the branded drug. The NDA holder must submit these patents for listing in an 

FDA publication entitled Approved Drug Products with Therapeutic Equivalence Evaluations

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(commonly known as the Orange Book) within 30 days of issuance of the patent. 21 C.F.R. § 

314.53. 

20. A company seeking to market a generic version of a branded drug may file an 

Abbreviated New Drug Application (“ANDA”) with the FDA. The generic applicant must 

demonstrate that its generic drug is therapeutically equivalent to the brand-name drug that it 

references and for which it seeks to be a generic substitute. Upon showing that the generic drug 

is therapeutically equivalent to the already-approved branded drug, the generic company may 

rely on the studies submitted in connection with the already-approved branded drug’s NDA to 

establish that the generic drug is safe and effective. 21 U.S.C. § 355(j)(2)(A)(iv). 

21. The FDA assigns a generic drug an “AB” rating if it is therapeutically equivalent 

to a brand-name drug. An AB-rated generic drug is the same as a brand-name drug in dosage 

form, safety, strength, route of administration, quality, performance characteristics, and intended 

use. A generic drug also must contain identical amounts of the same active ingredient(s) as the 

brand-name drug, although its inactive ingredients may vary. 

22. When a brand-name drug is covered by one or more patents listed in the Orange 

Book, a company seeking to market a generic version of that drug before the patents expire must 

make a “paragraph IV certification” in its ANDA certifying that the patents are invalid, 

unenforceable, and/or will not be infringed by the generic drug. 

23. If a company makes a paragraph IV certification, it must notify the patent holder 

of its certification. If the patent holder initiates a patent infringement suit against the company 

within 45 days of receiving such notice, the FDA may not grant final approval of the ANDA 

until the earliest of: (1) patent expiry; (2) district court resolution of the patent litigation in favor 

of the generic company; or (3) the expiration of an automatic 30-month stay. 

24. The Hatch-Waxman Act provides the first generic company or companies filing 

an ANDA containing a paragraph IV certification (“first filer”) with a period of protection from 

competition with other ANDA filers. This is referred to as the “180-day exclusivity” or “firstfiler exclusivity” period. The Supreme Court observed that the 180-day exclusivity period “can 

prove valuable, possibly worth several hundred million dollars” to the first filer. 

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25. A brand drug company can market a generic version of its own branded product at 

any time, including during the first filer’s exclusivity period. In that case, no ANDA is necessary 

because the brand company already has approval to sell the drug under its NDA. Such generics 

commonly are known as “authorized generics.” An authorized generic is chemically identical to 

the branded drug, but is sold as a generic product, typically through either the brand company’s 

subsidiary or through a third party. 

26. In the absence of generic competition, a brand drug company typically will not 

undercut the profits on its branded drug by introducing a lower-priced authorized generic version 

of that drug. When an ANDA filer enters, however, an authorized generic may become attractive 

to the NDA holder as a means of maintaining some of the revenue it otherwise would lose to the 

generic competitor. 

B. State law encourages substitution of AB-rated generic drugs for branded 

drugs 

27. All 50 states and the District of Columbia have drug substitution laws that 

encourage and facilitate substitution of lower-cost AB-rated generic drugs for branded drugs. 

When a pharmacist fills a prescription written for a branded drug, these laws allow or require the 

pharmacist to dispense an AB-rated generic version of the drug instead of the more expensive 

branded drug, unless a physician directs or the patient requests otherwise. 

28. State substitution laws were enacted in part because the pharmaceutical market 

does not function well. In a well-functioning market, a consumer selects and pays for a product 

after evaluating the product’s price and quality. In the prescription drug market, however, a 

patient can obtain a prescription drug only if the doctor writes a prescription for that particular 

drug. The doctor who selects the drug, however, does not pay for it and generally has little 

incentive to consider price when deciding which drug to prescribe. Instead, the patient, or in 

most cases a third-party payer such as a public or private health insurer, pays for the drug. But 

these purchasers have little input over what drug is actually prescribed. 

29. State substitution laws are designed to correct this market imperfection by shifting 

the drug selection choice from physicians to pharmacists and patients who have greater financial 

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incentives to make price comparisons. 

C. Competition from lower-priced generic drugs saves American consumers 

billions of dollars a year 

30. The Hatch-Waxman Act and state substitution laws have succeeded in facilitating 

generic competition and generating large savings for patients, healthcare plans, and federal and 

state governments. The first generic competitor’s product is typically offered at a 20% to 

30% discount to the branded product. Subsequent generic entry creates greater price competition 

with discounts reaching 85% or more off the brand price. According to a 2010 Congressional 

Budget Office report, the retail price of a generic is 75% lower, on average, than the retail price 

of a brand-name drug. In 2015 alone, the Generic Pharmaceutical Association reported that use 

of generic versions of brand-name drugs saved the U.S. healthcare system $227 billion. 

31. Because of these price advantages and cost savings, many third-party payers of 

prescription drugs (e.g., health insurance plans and Medicaid programs) have adopted policies to 

encourage the substitution of AB-rated generic drugs for their branded counterparts. As a result 

of these policies and lower prices, many consumers routinely switch from a branded drug to an 

AB-rated generic drug upon its introduction. Consequently, AB-rated generic drugs typically 

capture over 80% of a branded drug’s unit and dollar sales within six months of market entry. 

32. Consumers also benefit from competition between an authorized generic drug and 

an ANDA-based generic drug. Empirical evidence shows that competition from an authorized 

generic drug during the first-filer’s 180-day exclusivity results, on average, in retail prices that 

are 4% to 8% lower and wholesale prices that are 7% to 14% lower than prices without 

authorized generic competition. 

33. Competition from an authorized generic also typically has a significant financial 

impact on the first ANDA entrant. An authorized generic typically takes a significant share of the 

first ANDA entrant’s generic sales, thereby reducing revenues during its 180-day exclusivity 

period by an average of 40% to 52%. Thus, if a brand company agrees to refrain from launching 

an authorized generic, it can double the first filer’s revenues during the 180-day exclusivity 

period. This financial impact is well-known in the pharmaceutical industry. 

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V. Anticompetitive Conduct 

A. Lidoderm is a highly successful, highly profitable brand-name drug 

34. Lidocaine is a local anesthetic that prevents pain by blocking the signals at the 

nerve endings in the skin. The FDA first approved lidocaine for topical use in the early 1950s 

and has subsequently approved various topical lidocaine products for a number of different uses. 

35. Lidoderm is a transdermal lidocaine patch indicated for relief of pain associated 

with post-herpetic neuralgia (“PHN”), a complication of shingles. In a minority of patients, 

shingles damages nerve fibers and skin, causing pain that can last for months or even years. 

There is no known cure for PHN, but pharmaceutical products may offer temporary relief from 

PHN pain. 

36. Lidoderm is the only topical lidocaine patch indicated for the relief of pain 

associated with PHN and the only lidocaine formulation used as a first-line therapy for PHN 

pain. Unlike other first-line therapies for this condition (including antiepileptics and tricyclic 

antidepressants), Lidoderm is applied topically, resulting in minimal systemic absorption and a 

low risk of systemic side effects, drug-drug interactions, and drug-disease interactions. As a 

result, Lidoderm can be used as long as necessary, with minimal risk of the user developing a 

tolerance, dependence, or addiction. For these reasons, Lidoderm is a preferred therapy for 

treating PHN. 

37. An application seeking approval for Lidoderm (NDA No. 20-612) was submitted 

to the FDA in May 1996. The FDA approved Lidoderm in March 1999. 

38. Teikoku Pharma USA, Inc. owns the Lidoderm NDA, and its Japanese parent, 

Teikoku Seiyaku Co., Ltd (collectively with Teikoku Pharma USA, “Teikoku”) manufactures 

Lidoderm. Under the terms of a November 1998 supply and manufacturing licensing agreement 

between Endo and Teikoku (“Lidoderm Supply and Manufacturing Agreement”), Endo has the 

exclusive right to sell Lidoderm in the United States. Lidoderm patches are manufactured in 

Japan and imported into the United States by Teikoku Pharma USA through its operations in San 

Jose, California. Endo purchases Lidoderm from Teikoku Pharma USA. 

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39. Endo launched Lidoderm in the United States in September 1999. U.S. sales of 

Lidoderm grew substantially over time, from $22.5 million in 2000 to $947.7 million in 2012. 

For much of this period, Lidoderm was Endo’s best-selling product, accounting for up to 65% of 

the company’s total net revenues. 

40. As a unique treatment for relieving PHN pain, Lidoderm has been highly 

profitable for Endo. Before the entry of generic versions of Lidoderm, Endo sold branded 

Lidoderm at prices far above its costs of obtaining product from Teikoku and any royalties Endo 

paid relating to the product without sacrificing unit sales or revenues. Even accounting for other 

direct expenses that Endo allocated to selling and marketing Lidoderm, Endo’s profit margin on 

Lidoderm net sales was substantial, typically ranging between and . 

41. Endo regularly increased its list price, or wholesale acquisition cost (“WAC”), for 

Lidoderm without sacrificing unit sales. Between 2008 and 2013, Endo steadily increased its 

Lidoderm WAC from approximately $169 to more than $260 per box of 30 patches. Over that 

same time period, Endo’s unit sales of Lidoderm in the United States remained fairly consistent, 

fluctuating between approximately 1.5 and 2.0 million boxes quarterly. Endo’s ability to 

significantly increase WAC yet retain unit sales occurred despite the introduction of other 

products approved to relieve pain associated with PHN during the relevant time period. 

B. Potential generic competition threatened Endo’s Lidoderm franchise 

42. Lidoderm’s financial success drew the attention of several generic competitors. In 

November 2009, Watson Labs filed ANDA No. 200-675 seeking approval to market a generic 

version of Lidoderm. Watson Labs’ application to the FDA contained a paragraph IV 

certification that its generic product did not infringe U.S. patent No. 5,827,529 (the “’529 

patent”) and/or that the ’529 patent was invalid or unenforceable. The ’529 patent does not cover 

lidocaine, the active ingredient in Lidoderm, which has been used in medications for more than 

50 years. Rather, it covers only certain lidocaine patch formulations containing specified 

ingredient quantities. 

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43. Teikoku owns the ’529 patent, which expired in October 2015. Under an 

amendment to the Lidoderm Supply and Manufacturing Agreement, Teikoku granted Endo an 

exclusive license under the patent to sell Lidoderm in the United States. 

44. As to the remaining patents listed in the Orange Book for Lidoderm at the time of 

ANDA filing, Watson Labs filed what is known as a paragraph III certification representing that 

it would not sell its generic product in the United States until those patents expired on May 2, 

2012. 

45. Watson Labs was the first generic company to file an ANDA with a paragraph IV 

certification covering the ’529 patent. Watson Labs therefore became eligible for first-filer 

exclusivity, which could prevent the FDA from approving any other generic versions of 

Lidoderm until 180 days after Watson began selling its generic product. By delaying Watson’s 

entry, Endo could delay all generic Lidoderm entry. 

46. On or about January 14, 2010, Watson Labs notified Teikoku of its paragraph IV 

certification relating to the ’529 patent. Under the amended Lidoderm Supply and Manufacturing 

Agreement with Teikoku, Endo had the exclusive right to determine whether to sue Watson Labs 

for infringement, the right to name Teikoku as a party if necessary for the action, and the right, 

with limited exceptions, to control litigation and settlement of any claims. On February 19, 2010, 

Endo and Teikoku sued Watson Labs for infringement of the ’529 patent in federal district court 

in Delaware. 

47. Because Endo sued Watson Labs within 45 days of its paragraph IV notification, 

an automatic 30-month stay was imposed. This stay prevented the FDA from granting final 

approval to Watson Labs’ ANDA until mid-July 2012, absent an earlier court finding that the 

product did not infringe the ’529 patent or that the ’529 patent was invalid or unenforceable. 

48. While the patent litigation was pending, the Watson entities took significant steps 

to be ready to launch as soon as the FDA approved the ANDA for generic Lidoderm product, 

including spending more than $40 million on a Salt Lake City manufacturing plant where 

Watson would manufacture the generic patches and purchasing millions of dollars of raw 

materials needed for the patches. In addition, the Watson entities projected revenues from 

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generic lidocaine patch sales in forecasts and budgets for the period beginning in late 2012 or 

early 2013.

49. Launching Watson’s generic Lidoderm product upon FDA approval would likely 

require an at-risk launch. In addressing that possibility for generic Lidoderm, Watson Pharma’s 

CEO, Paul Bisaro, publicly stated that Watson has “never been shy” about launching at risk and 

that these launch preparations were not a “bluff,” but a genuine commitment to launch a generic 

Lidoderm product upon FDA approval, even if the patent litigation had not yet concluded: 

Just for the record and this is an important point, to demonstrate our 

commitment to this product we’ve built onto our facility in Salt Lake. We 

spent $40 million and we’re buying raw material today [February 2012], 

so we’re spending millions of dollars preparing for this launch. So this is 

not a bluff; it’s true. 

50. Endo was closely monitoring the steps Watson was taking to prepare for a generic 

lidocaine patch launch and Watson’s public statements about the likelihood of such a launch. 

Endo expected that competition from a generic product would lead to rapid and dramatic 

declines in the company’s Lidoderm revenues. During the first year after generic entry, Endo 

predicted that its branded Lidoderm revenues would decrease by at least $500 million. Watson 

similarly forecasted a sharp decline in branded Lidoderm sales after a generic product entered the 

market. 

51. In late June 2011, Watson Labs prevailed with respect to claim construction of the 

’529 patent. As the Patent Case Management Judicial Guide notes: “The construction of patent 

claims plays a critical role in nearly every patent case. It is central to evaluation of infringement 

and validity, and can affect or determine the outcome of other significant issues such as 

unenforceability, enablement, and remedies.” 

52. Shortly after the adverse claim construction decision, Endo filed a separate federal 

court action against Watson Labs alleging that its generic product infringed three additional 

patents that Endo had subsequently acquired—U.S. Patent Nos. 5,741,510 (the “’510 patent”), 

6,096,333 (the “’333 patent”), and 6,096,334 (the “’334 patent”). Of these three patents, Endo 

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listed only the ’510 patent in the Orange Book. No 30-month stay resulted from this later patent 

litigation. 

53. A six-day trial on the ’529 patent infringement claims occurred in February 2012. 

Coming out of that trial, Watson was confident in its litigation position. 

C. Endo paid Watson to abandon its patent challenge and refrain from 

competing until September 2013 

54. On May 28, 2012, Endo and Watson settled both Lidoderm patent litigations (“the 

Lidoderm Agreement”) before a final decision was issued in either case. 

 

55. The Lidoderm Agreement required (i) Watson to abandon the patent challenge 

and (ii) Watson Pharma and all its subsidiaries to refrain from initiating future patent challenges 

relating to Lidoderm or from launching any generic version of Lidoderm for more than a year, 

until September 15, 2013. In exchange, Endo agreed to pay the Watson entities through two 

separate components. First, Endo committed not to sell an authorized generic version of 

Lidoderm for up to 71⁄2 months following Watson’s launch (“No-AG Payment”). Second, Endo 

agreed to provide Watson Pharma’s wholly-owned wholesale distributor, Anda, Inc., with free 

branded Lidoderm product worth at least $96 million in 2013 and the possibility of additional 

free product worth up to approximately $240 million through 2015 (“Free Product Payment”). 

56. Watson could not have obtained the No-AG Payment or the Free Product 

Payment even by prevailing in the patent infringement litigations with Endo. 

1. The No-AG Payment 

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57. Endo had the legal right and financial incentive to compete with an authorized 

generic version of Lidoderm as soon as Watson entered with its generic Lidoderm product. 

Under the Lidoderm Agreement, however, Endo agreed not to compete with an authorized 

generic version of Lidoderm for 71⁄2 months after September 15, 2013, unless a third party 

launched a generic Lidoderm product. In exchange, Watson agreed to pay Endo a 25% royalty 

on the gross profits from Watson’s generic Lidoderm sales before entry of a second generic 

product. The parties characterized the No-AG Payment as a “partially exclusive” license. 

58. The No-AG Payment was extremely valuable to Watson. Because of eligibility 

for first-filer exclusivity, the No-AG Payment ensured that Watson would not face generic 

lidocaine patch competition for at least 180 days—and up to 71⁄2 months—after its launch. 

59. A substantial portion of this value from the No-AG Payment directly benefitted 

Watson Pharma. When Watson launched generic Lidoderm in September 2013, significant 

quantities of Watson’s generic product were sold through Anda, Inc., Watson Pharma’s whollyowned distribution subsidiary. 

 

60. The No-AG Payment was costly to Endo. Before settlement, Endo had been 

planning to launch an authorized generic if Watson launched at risk. Endo estimated that it 

would earn $150 million in authorized generic net revenues during the first year following 

generic entry. 

2. The Free Product Payment 

61. As part of the Lidoderm Agreement, Endo agreed to provide $12 million worth 

of branded Lidoderm product monthly from January through August 2013 to Watson Pharma 

through Anda, Inc. The product—worth a total of $96 million—was free to Watson: Watson paid 

Endo nothing for the branded product received under the Lidoderm Agreement. Endo further 

agreed to provide up to $144 million more in free branded Lidoderm in 2014 and 2015 if the 

FDA did not approve Watson’s generic Lidoderm application. As stated in the Lidoderm 

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Agreement, Endo provided this free branded product to Watson as “a good-faith, bargained-forresolution of the claims at issue in the Litigation.” Even accounting for contributions from 

Teikoku, Endo’s cost of providing the free branded Lidoderm product to Watson was roughly 

$85 million. 

62. Although the free branded product was provided to Anda, Inc., the true 

beneficiary was Watson Pharma. 

D. Endo’s payment to Watson is large 

63. The payment to the Watson entities under the Lidoderm Agreement is large. The 

total value of Endo’s expected payment to Watson, including the No-AG Payment and the Free 

Product Payment and discounting any royalties Watson paid to Endo, was at least $250 million. 

64. Endo’s commitment to refrain from selling an authorized generic for 71⁄2 months 

and to forgo the profits from authorized generic sales that it would have made during that period 

resulted in hundreds of millions in gain for Watson at a substantial cost to Endo. Endo’s 

commitment to refrain from selling an authorized generic would substantially increase Watson’s 

expected generic Lidoderm revenues by allowing Watson to capture all generic Lidoderm sales, 

instead of splitting these sales with Endo’s authorized generic. Additionally, as the only seller of 

generic Lidoderm, Watson could charge up to 33% more than if it faced competition from an 

authorized generic. In May 2012—the same month it entered into the Lidoderm Agreement—

Watson prepared several forecasts projecting Watson’s revenues and profits from generic 

Lidoderm sales. Based on these forecasts, Watson could expect to earn at least $214 million 

more in generic Lidoderm revenues during its first six months on the market if it did not face 

generic competition from an Endo authorized generic. Extending the effects of the no-AG 

commitment to the full 71⁄2 months granted under the Lidoderm Agreement increases the value to 

at least $260 million. 

65. The Free Product Payment was worth more than $90 million in additional 

compensation to Watson. Watson anticipated that it would sell the free branded product to 

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customers at the prevailing market price, which was approximately 4% to 5% lower than the 

contemporaneous brand wholesale acquisition cost (commonly referred to as “WAC”). Thus, for 

the $96 million of free branded product that Endo would supply to Watson Pharma through 

Anda, Inc. in 2013, Watson Pharma could expect to profit by $91.2 to $92 million. Because 

Watson Pharma did not have any direct costs for the free branded product, its entire revenues 

from those sales were profit. 

66. Any royalty Watson paid to Endo on Watsons’s generic sales would not offset 

Endo’s payment to Watson. Based on Watson’s contemporaneous forecasts, its royalty payments 

to Endo would only amount to approximately $101 million, compared to Endo’s total payment in 

excess of $350 million. 

67. Endo’s payment far exceeds any reasonable measure of avoided litigation costs in 

the parties’ underlying patent litigation. The settlement occurred late in the litigation, after a sixday trial and post-trial briefing. Endo already had spent around $11.5 million on the litigation. 

Any remaining litigation costs from either Lidoderm patent suit would be a small fraction of 

Endo’s total payment. 

68. Endo’s payment was designed to, and did, induce Watson to abandon the 

Lidoderm patent challenge and agree to refrain from marketing its generic Lidoderm product 

until September 2013. Watson’s decision to settle was driven not by the strength of Endo’s 

patent protection for Lidoderm, but by the large payment Endo made to Watson. 

69. Indeed, Endo’s payment exceeded the amount Watson projected to earn by 

launching its generic version of Lidoderm. Based on internal forecasts prepared around the time 

of settlement, Watson would earn at least $100 million more from the Lidoderm Agreement 

payment (even accounting for the royalty payments it would make to Endo) than it would earn 

by launching generic Lidoderm immediately following FDA approval in 2012. 

70. Endo was nonetheless willing to make the large payment to Watson because the 

September 15, 2013 entry date would ensure that Endo could maintain monopoly prices for 

Lidoderm throughout that period. 

E. Endo’s large payment is not justified 

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71. Endo’s payment to Watson cannot be justified solely as compensation for services 

to be performed by Watson. In fact, Watson provided no services to Endo in exchange for the 

Lidoderm Agreement payment worth hundreds of millions of dollars. 

72. Providing $96 million worth of free branded product to Watson Pharma through 

its wholesale distributor did not result in any significant procompetitive benefits. Indeed, Anda, 

Inc. sold the free branded product at prices comparable to what customers were paying other 

distributors of branded Lidoderm. 

73. The purpose and effect of Endo’s large payment was to induce Watson to 

abandon its patent challenge and agree not to compete with a generic version of Lidoderm until 

September 15, 2013. Endo’s commitment to forgo profitable Lidoderm authorized generic sales 

for 71⁄2 months and the provision of free branded product worth $96 million to Watson make no 

economic sense independent of securing Watson’s agreement not to market a generic version of 

Lidoderm until September 15, 2013. 

74. Likewise, Watson agreed not to compete with its own generic version of 

Lidoderm until September 2013 only because Endo shared its Lidoderm monopoly profits in the 

form of the No-AG Payment and the Free Product Payment. Without the large payment, Watson 

would not have agreed to refrain from competing until September 2013. 

75. There are no other procompetitive benefits, countervailing efficiencies, or 

increases in consumer welfare from the Lidoderm Agreement that outweigh the significant 

competitive harm caused by eliminating the risk of Watson’s generic entry until September 2013. 

76. Moreover, Endo’s payment to Watson was not reasonably necessary to achieve 

any purported procompetitive objective of the Lidoderm Agreement. 

VII. Monopoly Power 

A. Endo’s monopoly power concerning Lidoderm

77. Endo exercised monopoly power in the relevant market for lidocaine patches 

approved by the FDA for sale in the United States, through Watson’s entry with a generic 

version of Lidoderm in September 2013. There is substantial evidence of Endo’s monopoly 

power. Endo and Watson predicted a dramatic decline in the average price of lidocaine patches 

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following generic entry. Additionally, Endo and Watson expected that competition from a 

generic product would lead to a rapid and dramatic decline in Endo’s Lidoderm revenues. For 

example, Endo predicted that, during the first year after generic entry, its Lidoderm revenues 

would decrease by at least $500 million. 

78. The data available since the entry of Watson’s generic version of Lidoderm 

confirm the unique competitive impact of such entry on Lidoderm sales and prices. When 

Watson entered with its generic product, Endo reduced the price of branded Lidoderm as much 

as 40% in an effort to retain lidocaine patch sales. Nonetheless, within three months, Watson’s 

generic product had captured over 70% of the lidocaine patch unit sales. 

79. If Endo already were facing robust competition to Lidoderm, then the entry of 

generic competition to Lidoderm would not erode the sales volume of branded Lidoderm or the 

price of lidocaine patches so rapidly and dramatically. 

80. In addition, other drugs used to treat PHN have not meaningfully constrained 

Endo’s pricing or sales of Lidoderm. Between 2008 and 2013, Endo steadily increased its 

Lidoderm WAC from approximately $169 to $260 per box of 30 patches. Over that same period, 

however, Endo’s unit sales of Lidoderm in the United States remained largely stable, fluctuating 

between 1.5 and 2.0 million boxes quarterly. During that same period, the entry of new branded 

products approved to relieve pain associated with PHN, such as Qutenza, Horizant, and Gralise, 

had no discernible impact on Lidoderm prices or unit sales. 

81. Moreover, because of its unique characteristics, Lidoderm is not reasonably 

interchangeable with other medications used to relieve pain associated with PHN. Unlike other 

PHN treatments, Lidoderm is a topical treatment that can be used at home and applied directly to 

the skin on the affected area. While other drug therapies, such as anticonvulsants and 

antidepressants, may be used in conjunction with lidocaine patches to improve results, they are 

not viewed by physicians as substitutes. As the head of Endo’s Pain Management business 

explained: “Lidoderm was unique in the attributes that it presents to a physician and to a patient 

as they’re seeking a therapy . . . [T]here really is not another product that is exactly like 

Lidoderm.” 

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82. Before September 2013, Endo consistently held a 100% share of the relevant 

market for lidocaine patches. 

83. Substantial barriers to entry exist in the lidocaine patch market. Potential new 

branded drug competitors need to conduct expensive clinical trials and obtain FDA approval. 

Potential sellers of generic lidocaine patches also face substantial barriers to entry, including the 

need to obtain FDA approval, costly specialized equipment and facilities to manufacture the 

patches, and Endo’s ability to trigger an automatic 30-month stay of FDA approval by filing a 

patent infringement lawsuit. 

B. Watson’s monopoly power concerning generic lidocaine patches 

84. Watson exercised monopoly power in the relevant market of generic lidocaine 

patches approved by the FDA for sale in the United States from September 2013 until Endo 

began selling an authorized generic in May 2014. While numerous other drugs are used to relieve 

pain associated with PHN (including branded Lidoderm), there is substantial evidence of 

Watson’s monopoly power throughout the relevant time period. Both Endo and Watson 

predicted that generic lidocaine patch prices would fall considerably upon entry of the second 

generic product, with no corresponding effect on the price of the branded product. 

85. The data available since the entry of Endo’s authorized generic version of 

Lidoderm confirm the unique competitive impact of such entry on generic Lidoderm sales and 

prices. By September 2014, Endo’s authorized generic product had captured over 40% of generic 

lidocaine patch unit sales, and authorized generic competition had lowered the average price of 

generic lidocaine patches by more than 16%. Endo’s efforts to discount the branded product had 

no comparable effect on generic prices. 

86. If Watson were already facing robust competition to its generic lidocaine patch, 

then the entry of Endo’s authorized generic version of Lidoderm would not erode the sales 

volume of Watson’s generic lidocaine patch or the price of lidocaine patches so rapidly and 

dramatically. 

87. In addition, although a branded product is therapeutically equivalent to its generic 

counterpart, a unique competitive dynamic exists between generics. Typically, retail pharmacies 

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stock the branded product plus one generic version. Thus, while the brand company can expect 

its product to be available at every pharmacy, generic companies must compete against one 

another to be a pharmacy’s primary generic supplier. Price is the primary mechanism of such 

competition. Consequently, entry of additional generic competitors drives down the average 

generic price, often to a fraction of the brand’s pre-generic-entry price. 

88. The initial price offered by the first generic entrant is typically a percentage off 

the brand’s list price (or WAC). But after the initial generic sales, any correlation between the 

prices of the branded product and the generic products generally dissipates. Branded prices often 

rise after generic entry as brand companies extract additional profits from those patients who are 

not price sensitive and continue to buy the branded product, while generic prices fall as more 

generic products come to market. The head of Endo’s Pain Management business summarized 

this dynamic as follows: “Nobody considers an average price of brand plus generic because they 

operate in a different dynamic.” Instead, “generic pricing tend[s] to be a function of how many 

competitive players are there in the generic market.” 

89. Potential sellers of generic lidocaine patches face substantial barriers to entry, 

including obtaining FDA approval, costly specialized equipment and facilities to manufacture the 

product, and Endo’s ability to trigger an automatic 30-month stay of FDA approval by filing a 

patent infringement lawsuit. 

90. Before May 2014, Watson held a 100% share of the relevant market for generic 

lidocaine patches. 

VIII. Harm to Consumers and Competition 

A. The Lidoderm Agreement eliminated the risk of generic competition for 

more than one year 

91. By impeding generic competition, Endo and Watson’s conduct denied consumers 

and other purchasers of Lidoderm access to AB-rated generic versions of Lidoderm that would 

offer the same therapeutic benefit as branded Lidoderm, but at a lower price. 

92. The agreement between Endo and Watson precluding Watson from launching a 

generic version of Lidoderm until September 2013 harmed competition and consumer welfare by 

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eliminating the risk that Watson would have marketed its generic version of Lidoderm before 

September 2013. Through their agreement, Endo eliminated the potential that: (1) Endo would 

have agreed to settle the patent litigation on terms that did not compensate Watson, but provided 

for generic entry earlier than September 2013; or (2) Watson would have otherwise launched its 

generic Lidoderm before September 2013, whether or not patent litigation was still pending. 

93. Before the Lidoderm Agreement, Watson was preparing to launch its generic 

lidocaine patch as early as FDA approval, which it received in August 2012. Watson did not plan 

to wait until an appeals court decision in patent litigation before launching its generic product.

Watson’s generic entry would have quickly and significantly reduced Endo’s market share, 

promoted economic efficiency, and led to significant price reductions for lidocaine patches. 

Indeed, when Watson ultimately launched its generic version of Lidoderm in September 2013, 

Endo immediately responded by providing bigger discounts to retain Lidoderm’s preferred 

position on certain drug formularies. 

94. Watson abandoned its generic entry plans because it received a share of Endo’s 

monopoly profits in the form of the No-AG Payment and the Free Product Payment. Without the 

large payment, Watson would have launched its generic version of Lidoderm prior to September 

2013. 

95. Entry of Watson’s generic product would have given consumers the choice 

between branded Lidoderm and lower-priced generic substitutes for Lidoderm. Many consumers 

would have chosen to purchase the lower-priced generic version instead of higher-priced branded 

Lidoderm. In its contemporaneous forecasts, Endo predicted its Lidoderm revenues would 

decrease by at least $500 million during the first year after generic entry. As a result of this 

generic competition, consumers would have saved hundreds of millions of dollars. By entering 

into their anticompetitive agreement, Endo and Watson have shared additional monopoly profits 

at the expense of consumers. 

96. Absent an injunction, there is a cognizable danger that Endo and Watson will 

engage in similar violations causing future harm to competition and consumers. Defendants 

knowingly entered into and carried out a collusive anticompetitive scheme to preserve and share 

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Endo’s monopoly profits. Each did so conscious of the fact that this agreement would greatly 

enrich them at the expense of consumers. 

97. Defendants have the incentive, opportunity, and demonstrated interest to continue 

to enter other reverse-payment agreements in the future. Endo and Watson each continue to 

develop and manufacture pharmaceutical products. Defendants are regularly involved in 

multiple patent litigations relating to different drugs. Any of these existing or future patent 

litigations provides the incentive and opportunity to enter into another a reverse-payment 

agreement. 

98. In addition, Defendants have the demonstrated interest to continue to enter into 

such agreements in the future. Indeed, both Endo and Watson have entered into similar reversepayment agreements, even after the U.S. Supreme Court’s 2013 decision in FTC. v. Actavis.

These agreements include arrangements in which the payment is in the form of: (1) a business 

transaction entered at or around the same time as the patent litigation settlement (serving a 

similar purpose as the Free Branded Payment); or (2) a no-AG commitment in which the brand 

company commits not to sell an authorized generic product for some period of time. 

99. Defendants obtained the full benefit of their unlawful agreement concerning 

Lidoderm. They did not abandon or disavow the Lidoderm Agreement or any other reversepayment agreement following the Supreme Court’s decision in FTC v. Actavis, which rejected 

the near automatic immunity for reverse-payment settlements that some courts had erroneously 

adopted. On the contrary, Endo and Watson maintain that their unlawful Lidoderm Agreement 

was procompetitive. 

B. The Lidoderm No-AG Payment reduced competition for generic lidocaine 

patches for 71⁄2 months

100. The Lidoderm Agreement further harmed competition and consumers by 

eliminating competition for sales of generic lidocaine patches until May 2014. 

101. Before the Lidoderm Agreement, Endo and Watson were potential competitors in 

the sale of generic lidocaine patches. Indeed, Endo’s authorized generic was the only potential 

generic competition to Watson’s generic lidocaine patch during the 180-day first-filer exclusivity 

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period for generic Lidoderm. Under the Hatch-Waxman Act, the FDA was prohibited by law 

from approving any other generic version of Lidoderm until the 180-day exclusivity period had 

expired or been forfeited. Endo, however, was legally entitled to market an authorized generic 

version of its own Lidoderm product at any time, including during the first filer’s exclusivity 

period. 

102. Before the Lidoderm Agreement, Endo was planning to launch an authorized 

generic as soon as Watson launched its generic lidocaine patch. Under its agreement with 

Teikoku, Endo had the exclusive right to sell an authorized generic version of Lidoderm in the 

United States. Endo also had the financial incentive to do so. As soon as Watson entered with its 

generic product, Endo could sell an authorized generic to compete for sales to generic lidocaine 

users, while preserving branded Lidoderm sales for the minority of users who were willing to 

pay more for the branded product. Endo estimated that it could make more than $150 million in 

net sales during the first year after generic entry by selling an authorized generic in competition 

with Watson. 

103. Under the Lidoderm Agreement, however, Watson acquired an exclusive field-ofuse license that prevented Endo from launching an authorized generic until May 2014. By 

eliminating the potential competition between Endo’s authorized generic and Watson’s generic 

version of Lidoderm, this acquisition substantially reduced competition in the market for generic 

lidocaine patches. 

104. As a result of Endo and Watson’s conduct, competition between generic lidocaine 

patches was delayed for 71⁄2 months until May 2014. Absent Endo’s commitment not to compete 

with an authorized generic, Endo would have launched an authorized generic at or near the time 

of Watson’s generic lidocaine patch entry. Endo’s authorized generic entry would have resulted 

in significantly lower prices for generic lidocaine patches and hundreds of millions of dollars in 

savings for generic lidocaine patch purchasers. Instead, Endo and Watson shared additional 

profits at the expense of consumers. 

105. Upon termination of the exclusive field-of-use license, Endo immediately 

launched a Lidoderm authorized generic through its subsidiary, Qualitest. Competition from 

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Endo’s authorized generic product caused the price of generic lidocaine patches to quickly fall 

by 16% or more. This significant price reduction is consistent with Endo’s and Watson’s 

forecasts as well as the empirical literature on the price effects of authorized generic competition. 

106. The partially exclusive nature of Watson’s license resulted in no cognizable 

benefits to counteract the harm caused by the absence of competition from an authorized generic. 

107. Endo’s commitment not to compete with an authorized generic was not 

reasonably related to achieving any cognizable benefits of a larger procompetitive venture. 

108. Because of barriers such as FDA approval, entry by other firms would not occur 

to deter or counteract the competitive effects of eliminating an authorized generic. 

Count I

Restraint of Trade – Against Endo, Watson Labs, Watson Pharma, and Allergan plc as a 

Successor-in-Interest or Alter Ego of Watson Pharma 

109. Plaintiff re-alleges and incorporates by reference the allegations in all of the 

paragraphs above. 

110. The agreement between Endo and Watson that Watson would not compete by 

marketing lidocaine patches until September 2013 constitutes an unfair method of competition in 

violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

Count II 

Monopolization – Against Endo 

111. Plaintiff re-alleges and incorporates by reference the allegations in all of the 

paragraphs above. 

112. Endo’s willful maintenance of its monopoly in the lidocaine patch market through 

a course of anticompetitive conduct, including its entry into an unlawful agreement with Watson, 

constitutes an unfair method of competition in violation of Section 5(a) of the FTC Act, 15 

U.S.C. § 45(a). 

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Count III 

Restraint of Trade – Against Endo, Watson Labs, Watson Pharma, and Allergan plc as a 

Successor-in-Interest or Alter Ego of Watson Pharma 

113. Plaintiff re-alleges and incorporates by reference the allegations in all of the 

paragraphs above. 

114. The agreement between Endo and Watson that Endo would not compete in the 

market for generic lidocaine patches until May 2014 constitutes an unfair method of competition 

in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

Count IV 

Unlawful Acquisition – Against Watson Labs, Watson Pharma, Allergan plc as a 

Successor-in-Interest or Alter Ego of Watson Pharma, and Endo 

115. Plaintiff re-alleges and incorporates by reference the allegations in all of the 

paragraphs above. 

116. Watson’s acquisition of an exclusive field-of-use license from Endo substantially 

lessened competition in the generic lidocaine patch market in violation of Section 7 of the 

Clayton Act, 15 U.S.C. § 18. 

Prayer for Relief 

 WHEREFORE, Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to 

issue a permanent injunction against violations of the FTC Act and, in the exercise of its 

equitable jurisdiction, to order ancillary equitable relief to remedy the injury caused by 

Defendants’ violations; therefore, the FTC requests that this Court, as authorized by 15 U.S.C. 

§ 53(b), 15 U.S.C. § 26, and its own equitable powers, enter final judgment against Defendants 

on Counts I, II, III, and IV, ordering and adjudging: 

1. That the agreement between Endo and Watson violates Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a); 

2. That Endo’s course of conduct, including its entry into an unlawful agreement with 

Watson, violates Section 5(a) of the FTC Act, 15 U.S.C. § 45(a); 

3. That Watson’s acquisition of an exclusive field-of-use license from Endo violates 

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