After taking the rare step of ordering the FTC to respond to interrogatories about why it wanted to subpoena the CEO of Watson Pharmaceuticals regarding a reverse-payment settlement the company entered with Cephalon Inc., the same judge has now recommended the court enforce the subpoena.
In his report and recommendations to the U.S. District Court for the District of Columbia in FTC v. Bisaro, Magistrate Judge Alan Kay said the court must enforce a subpoena, despite allegations the agency improperly issued it, as long as a proper purpose also exists.
Kay ruled last month that Watson CEO Paul Bisaro presented a "colorable claim" that the FTC may have exceeded its authority by using its investigative powers to pressure generic drug company Watson to relinquish exclusivity rights it had regarding a generic form of Cephalon's sleep disorder drug Provigil and enter a deal with third-party generic Apotex. The FTC suggested it would have to reopen a front office investigation of Watson if it didn't enter the deal, according to court filings.
"While Mr. Bisaro initially made a colorable showing that the FTC shared confidential information with Apotex, he has subsequently failed to prove those allegations," Kay said in his report Tuesday.
He said subsequent facts provided to the court do not establish a direct attempt by the FTC to harass Bisaro or that the investigation was conducted for an improper purpose.
"To be sure, the undersigned disagrees with the way the FTC conducted this aspect of its investigation -- in particular, the FTC's attempts 'to use its investigative power to pressure a company to waive statutory rights it had legitimately acquired or to enter into a business deal with a competitor,'" Kay said. "However, enforcement of a subpoena is called for as long as a proper purpose does exist."
http://www.law.com/jsp/article.jsp?id=1202470027894
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