The FTC, New York and six other states filed suit against Vyera Pharmaceuticals and its former CEO, Martin Shkreli, alleging anticompetivie conduct in connection with Daraprim, the only FDA approved drug for the treatment of the life-threatening parasitic disease toxoplasmosis. The suit alleges that Vyera purchases the unpatented and widely available drug in 2015 and…
The brand name maker of the prescription drug Hytrin, Abbott, entered into an agreement with Geneva to keep Geneva’s generic version of Hytrin off the market. Geneva was paid a substantial amount of money by Abbott while Abbott continued to collect monopoly profits on its name brand drug. Because of federal regulatory system for new generic entry, Geneva effectively blocked the entry of other generic drug makers. The matter settled in conjunction with MDL litigation.
State of California v. Teva Pharmaceutical Industries, Ltd. et al., No. 2:19-cv-03281 (E.D. Pa. 2019)
California agreed to four settlement agreements with pharmaceutical companies to resolve claims that they entered into collusive “pay-for-delay agreements.â€
The state argued that Teva delayed entry of generic competition through four pay-for-delay agreements that illegally maintained its monopoly over Provigil sales between 2006 and 2012. This resulted in artificially high costs of Provigil for consumers. The state secured $69 million for California and a 10-year injunction prohibiting Teva from entering into pay-for-delay agreements. As part of the $69 million settlement, a $25,250,000 consumer fund will be created for California residents who purchased Provigil, Nuvigil or Modafinil during this time.
The state also argued that Teva, Endo Pharmaceuticals, and Teikoku entered into pay-for-delay agreements regarding Lidoderm, a medical patch to relieve shingles pain. In June 2019, the state settled with Endo Pharmaceuticals, securing an eight-year injunction against further pay-for delay agreements and payment of $760,000. The settlement also included a 20-year injunction against Teikoku, a partner in the production of Lidoderm with Endo.
Plaintiff states alleged that defendant, the producer of Lidoderm (pain medication), paid or incentivized generic drug makers to delay entry into market to protect its monopoly on Lidoderm. (“pay for delay”) The settlement agreement, which expires in twenty years, prohibits Teikoku from entering into agreements that restrict generic drug manufacturers from researching, manufacturing, marketing, or selling products for a period of time and requires Teikoku to cooperate in an ongoing investigation into similarly anticompetitive conduct by other drug manufacturers, among other things.
State of California ex rel. Becerra v. Watson Laboratories, Inc., No. 17-cv-00562 (N.D. Cal. Feb. 3, 2017)
Plaintiff state filed complaint alleging violations of the Sherman Act and California’s Cartwright Act. the complaint alleged an anticompetitive pay-for-delay agreement with respect to the Lidoderm pain relief patch. According to the complaint, Watson Pharmaceuticals Inc. colluded with its competitors and fixed the price of the generic version of the drug.
Watson, which subsequently was acquired by Teva Pharmaceutical Industries Ltd., allegedly agreed to settle a patent infringement suit with its competitor Endo Pharmaceuticals Inc., which was the only producer of the name-brand pain relief patch. Pursuant to the agreement, Endo agreed to allow Watson to sell branded Lidoderm at no cost, if Watson agreed to hold off on its release of a generic version of the drug. Then, when Watson released its generic version, Endo did not release its own generic version for nearly eight months, the suit claims.
According to the complaint, “The threat of generic entry to Lidoderm posed significant financial risks for the company,â€ and “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.â€
California settled with Endo for a $760,000 payment (not characterized as attorneys’ fees or civil penalties) and an eight-year injunction preventing future pay-for-delay conduct.
FTC and Plaintiff States v. Mallilnckrodt Ard Inc. (formerly Questcor), No. 1:17-cv-00120 (D.D.C. Jan. 18, 2017)
Four states and the FTC reached a $100 million settlement with Mallinckrodt plc and its US subsidiary, formerly known as Questcor Pharmaceuticals, Inc. resolving a lawsuit accusing Questcor of monopolizing the market for Achthar, the only adrenocorticotropic hormone (ACTH) based therapeutic drug sold in the United States. ACTH is used as a last resort to treat infantile spasms and multiple sclerosis. Questcor allegedly blocked competition for Acthar by disrupting the bidding process and acquiring the U.S. rights for Synacthen Depot, the only other ACTH based drug sold in the world. In 2001, Questcor bought the rights to Acthar and increased the price of it by 85,000 percent, charging over $34,000 for a vial of the drug that used to cost $40 per vial. In 2012, Novartis Pharma A.G sold the U.S. rights of Synacthen, Achthar’s only competitor. The complaint alleges that three other companies had all conducted due diligence and submitted formal offers for Synacthen with plans to develop and launch Synacthen in the United States in direct competition with Questcor. However, perceiving the threat to its U.S. monopoly if a rival drug company purchased the assets, Questcor stepped in to outbid the three other companies, offering Novartis $135 million in guaranteed payments with only vague plans for Synacthen and after very limited due diligence. Through the acquisition, Questcor sought to extinguish the most likely challenges to its Acthar monopoly. According to the complaint, this allowed Questcor to continue charging over $34,000 per vial for H.P. Acthar Gel. In addition to paying $100 million in disgorgement, Under the settlement, Mallinckrodt will pay $100 million. The company will also be required to license a competitor to the rights it acquired from Novartis to commercialize and develop Synacthen in the United States, including the Synacthen trademark, along with clinical trial data and certain intellectual property related to manufacturing and formulation. Mallinckrodt is also prohibited from taking actions that would interfere with clinical trials or clinical plans for Synacthen.
Plaintiff states alleged that the makers of Suboxone, a drug used to treat opioid addiction, engaged in a scheme to block generic competitors and raise prices. Specifically, they are conspiring to wtich Suboxone from a tablet version to a flim in order to prevent or delay generic entry. The states allege that the manufacturers engaged in “product hopping” in which a company makes slight changes to its product to extend patent protections and prvent generic alternatives. The complaint was filed under seal.
Twenty states filed a federal lawsuit against six generic drug manufacturers, alleging that they entered into long-running and well coordinated illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States for two drugs: doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication. The lawsuit was filed under seal to avoid compromising a continuing investigation. In the complaint, the states allege that the misconduct was conceived and carried out by senior drug company executives and their marketing and sales executives. The complaint further alleges that the defendants routinely coordinated their schemes through direct interaction with their competitors at industry trade shows, customer conferences and other events, as well as through direct email, phone and text message communications. The states further allege that the drug companies knew that their conduct was illegal and made efforts to avoid communicating with each other in writing or, in some instances, to delete written communications after becoming aware of the investigation. The states allege the anticompetitive conduct, including price-fixing and price maintenance, market allocation and other anticompetitive acts, caused significant, harmful and continuing effects in the country’s healthcare system. The states sought an injunction to prevent the companies from engaging in illegal, anticompetitive behavior and also sought equitable relief, including disgorgement. An additional 20 states joined the complaint in March 2017.
In May 2015, the FTC settled a “pay-for-delay” suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations. In August 2016, forty-eight states filed suit in the Eastern District of Pennsylvania against Cephalon alleging anticompetitive conduct by Cephalon to protect the profits it earned from having a patent-protected monopoly on the sale of its landmark drug, Provigil. According to the complaint, Cephalon’s conduct delayed generic versions of Provigil from entering the market for several years. The complaint alleged that as patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable. Before it was declared invalid, Cephalon was able to use the patent to delay generic competition for nearly six additional years by filing patent infringement lawsuits. Cephalon settled those lawsuits by paying competitors to delay sale of their generic versions of Provigil until at least April 2012. Consumers, states, and others paid millions more for Provigil than they would have had generic versions of the drug launched by early 2006, as expected. A settlement was filed with the complaint, which includes $35 million for distribution to consumers who bought Provigil.
People of the State of New York v. Actavis, PLC et al., No. 14-CV-7473 (RWS)(S.D.N.Y filed Dec. 10, 2014)
Plaintiff state sued pharmaceutical manufacturer Actavis plc and its New-York based subsidiary Forest Laboratories seeking an injunction to prevent them from withdrawing the Alzheimer’s drug Namenda from the market and switching patients to a once daily version, Namenda XR. Namenda’s patent will expire in July 2015 and the company thereafter faces competition from generic drug makers. According to the complaint, Actavis planned to force patients to switch unnecessarily to Namenda XR because it had a longer patent. Once patients switch to Namenda XR, it would be difficult for patients to switch drugs again once generics become available. Normally, state substitution laws allow pharmacists to dispense generics without being forced to obtain physician approval. According to the complaint, even though Namenda and Namenda XR have the same active ingredient, pharmacists will not be allowed to offer generic Namenda to patients taking Namenda XR; a doctor’s approval would be required to make that switch. This means that most Alzheimer’s patients and their families will remain on Namenda XR. The lawsuit alleges that, by forcing patients to switch to Namenda XR, Actavis is gaming the regulatory system that governs pharmaceuticals and violating antitrust laws designed to encourage competition and keep prices down for consumers. In December 2014, the district court enjoined Actavis from ceasing production of Namenda, and the injunction was affirmed by the Second Circuit in May 2015.