The Interplay Key Decisions at the Intersection of Antitrust and Life Sciences – June 2024 | WilmerHale
Court Orders Delisting of Patents from Orange Book and Denies Motion to Dismiss Antitrust Counterclaims for Improper Orange Book Listings. On June 10, Judge Stanley Chesler of the District of New Jersey entered judgment on the pleadings ordering Teva to remove five patents it had listed in the Food and Drug Administration’s Orange Book. The court also denied Teva’s motion to dismiss antitrust counterclaims arising from those patent listings and allegations of sham patent litigation. Teva had sued Amneal for patent infringement after Amneal filed an Abbreviated New Drug Application (ANDA) containing a paragraph IV certification that the proposed product, a generic version of ProAir HFA (albuterol sulfate) Inhalation Aerosol, would not infringe any valid patents. Amneal asserted counterclaims requesting that the court order Teva to “delist” from the Orange Book the at-issue patents and alleging violations of the Sherman Act and New Jersey Antitrust Act. Holding that the delisting claim could be decided as a matter of law based on the interpretation of patent listing provisions of the Food Drug and Cosmetic Act, the court ruled that the patents were “improperly listed” in the Orange Book because they contained claims for only the inhaler and not the active ingredient itself. In its motion to dismiss Amneal’s antitrust counterclaims, Teva argued that even if the patents were improperly listed, under Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, 540 U.S. 398 (2004) (Trinko), failing to comply with a statute that is designed to aid rivals is not a basis for antitrust liability. The court rejected Teva’s argument and distinguished Trinko, explaining that the Supreme Court had refused to expand the bounds of the antitrust duty to deal and found that the Congress had given the Federal Communications Commission power to enforce the relevant statute that the defendant had allegedly violated. By contrast, the court held, antitrust claims arising from improperly listing patents do not involve an expansion of antitrust doctrine and that there is no regulatory enforcement scheme to police Orange Book listings. In response to the decision, FTC Chair Lina Khan, whose agency filed an amicus brief supporting Amneal’s counterclaims, tweeted that “Pharmaceutical firms are on notice that they must remove their junk patent listings, which undermine fair competition and inflate prices for critical medicines.” The case is Teva Branded Pharmaceutical Products R&D, Inc. v. Amneal Pharmaceuticals of New York LLC, No. 23-20964 (SRC) (D.N.J. June 10, 2024).
Court Grants Motion to Dismiss Monopolization Claims Involving Revlimid Arising From Alleged Refusal to Sell Samples and Reverse Payments. On June 6, 2024, Judge Esther Salas of the District of New Jersey granted defendants Celgene Corp.’s and Bristol-Myers Squibb Co.’s motion to dismiss various claims for alleged state and federal antitrust violations and state unfair competition claims. Plaintiffs alleged, among other claims, that Celgene monopolized the relevant market for Revlimid (and a related product) by preventing generic drug manufacturers from obtaining samples of the drug, and thereby inhibiting required bioequivalence studies necessary for ANDA. Plaintiffs also alleged that Celgene entered anticompetitive reverse payment agreements with various generic drug manufacturers to prevent those manufacturers from introducing competing products using components of the Revlimid compound, and improperly capped sales by those competitors.
In dismissing, the court explained that although courts must consider “the mix of various ingredients” allegedly supporting a monopolization claim, none of the components of the alleged scheme were unlawful. Through that lens, the court held that Plaintiffs failed plausibly to allege a claim based on Celgene’s refusal to sell samples to generics because Celgene had no prior course of dealing with generics manufacturers and therefore was under no obligation to provide Revlimid for bioequivalence studies. Applying the Supreme Court’s precedent in Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985), and Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004), as well as recent decisions from the Sixth and Eight Circuits, the court agreed with defendants’ argument that “they cannot be subject to antitrust liability for refusing to deal with those generic competitors who had failed to obtain FDA approval of their study protocols before requesting samples of Revlimid.” The lack of FDA approval by generic competitors, the court found, provided a legitimate business justification for refusing to provide samples: the drugs are highly dangerous and regulated by the FDA for distribution.
The court similarly found Plaintiffs’ reverse-payment allegations implausible because it determined that Celgene’s waiver of royalty rights and negotiation of a volume limit did not plausibly transfer any value to the licensee. The court concluded that Celgene was not obligated to charge the licensee a royalty at all, and it “is not even plausible that the volume limited nature of the license, standing on its own,” constituted a guaranteed transfer of value to the licensee because the licensee could have capped its own production absent any agreement to avoid litigation. The case is In re Revlimid & Thalomid Purchaser Antitrust Litig., No. CV 19-7532 (ES) (MAH) (D.N.J. June 6, 2024).
Court Grants Summary Judgment in Lipitor Reverse-Payment Case on Causation Grounds. On June 6, Judge Peter Sheridan of the District of New Jersey, who oversees the Lipitor Multi-District Litigation, granted summary judgment in favor of defendant Ranbaxy Laboratories on plaintiffs’ reverse payment claims. Ranbaxy submitted its first-to-file ANDA for generic Lipitor in 2002. After Pfizer sued for patent infringement, the parties settled in 2008 to allow Ranbaxy to launch its generic Lipitor no earlier than November 30, 2011, five years before expiration of Pfizer’s patents. Plaintiffs challenged this settlement agreement as an unjustified reverse payment that violated Sections 1 and 2 of the Sherman Act. At summary judgment, the court agreed with Ranbaxy that plaintiffs failed to create a genuine issue of material fact that it was more likely than not, but for the settlement agreement, that the FDA would have completed its review of Ranbaxy’s ANDA even one day earlier. While plaintiffs argued that the selection of a licensed entry date of November 30, 2011 drove the FDA’s approval timeline, the court found that FDA approval on that date was not alone sufficient proof than an earlier agreed-upon entry date would have led to earlier FDA approval. The court noted that Ranbaxy faced significant regulatory requirements to gaining FDA approval, including the FDA’s invocation of the Application Integrity Policy (AIP) on February 25, 2009 due to concerns about one of its production facilities, which prevented FDA from reviewing Ranbaxy’s ANDA until after FDA granted an exception on May 16, 2011. At that time, the FDA said it “anticipated” completing its ANDA review by November 30, 2011; this targeted timeline presented an “abstract discussion,” in the court’s view, rather than a guarantee or promise. The court also noted that despite FDA’s awareness of an agreement between Ranbaxy and Teva would have allowed for entry by Teva prior to November 30, 2011, FDA did not approve Teva’s ANDA by that point due to its investigation of Teva’s own production facilities. Given the evidence, the court found that there was a high likelihood of “cosmic coincidence” that the FDA approved Ranbaxy’s ANDA on the earliest possible launch date, though observed that this case presented “incredibly unusual circumstances.” The case is In re Lipitor Antitrust Litig., No. 3:12-cv-2389 (PGS/JBD), (D.N.J. June 6, 2024).
European Commission Announces First Ever Formal Pharma Cartel Price-Fixing Complaint. The European Commission announced on June 13 that it is has filed a Statement of Objections for its first pharmaceutical cartel case. The EC alleges that an Indian-based company, Alchem International Pvt. Ltd., and it subsidiary fixed the “minimum sales price” of an active ingredient in drugs to reduce abdominal cramping, Buscopan, and its generic versions. The EU announcement comes after October 2023 fines imposed upon six other companies for price fixing of the same ingredient in the same alleged conspiracy—the other six settled with the EU authorities in October 2023 for $14.4 million (€13.4 million) after admitting to coordinating to set the sales price of the ingredient to common distributors and manufacturers. One of those companies, C2 Pharma was not fined as it cooperated with European authorities and helped build its their cases. The Statement of Objections is not publicly available. The case is No. AT.40636 before the European Commission Competition division.
FTC Submits Comment Supporting Proposed USPTO Rule Regarding Disclosure of Patent Settlement Agreements. The FTC submitted a comment on June 18 expressing support for a proposed Patent and Trademark Office (PTO) rule would require parties to proceedings before the Patent Trial and Appeal Board (PTAB) to file all settlement agreements resulting in termination of the proceedings. As the USPTO explained in its April 19, 2024 Notice of Proposed Rulemaking, one of the proposed rule changes expands on the current statutory requirement that parties settling cases after institution by PTAB must file related settlement agreements. The proposed rule would require that parties file agreements reflecting settlement at any point, even before the agency institutes (i.e., agrees to proceed with) any case. Consistent with 35 U.S.C. § 317(b), agreements filed with the PTAB shall be made available to federal agencies on written request.
The FTC comment focuses on the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), which requires pharmaceutical companies to file patent settlements and related agreements with the FTC and Department of Justice. Congress expanded the MMA in 2018, the FTC explains, to require similar filings regarding settlement agreements for biologics and biosimilars. The FTC argues that the proposed PTO rule “would enhance the government’s ability to monitor and curb potentially harmful and unlawful pre-institution settlement agreements,” which “have made up over half of all settlements in [America Invents Act] proceedings” before the PTAB.
The deadline for comments on the proposed rule was June 18. The PTO has not indicated when the contemplated rule change may take effect.
