Interaction: Key Decisions at the Intersection of Antitrust and Life Sciences – June 2024

The court ordered the patents to be removed from the Orange Book and dismissed the motion to dismiss the antitrust claims concerning incorrect entry in the Orange Book. On June 10, Judge Stanley Chesler of the District of New Jersey issued a ruling in the lawsuits seeking to have Teva 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 sued Amneal for patent infringement after Amneal filed an abbreviated new drug application (ANDA) that contained a statement in paragraph IV that its proposed product, a generic version of ProAir HFA (albuterol sulfate) Inhalation Aerosol, would not infringe any valid patents. Amneal filed counterclaims requesting that the court order Teva to “remove” the disputed patents from the Orange Book and alleging violations of the Sherman Act and the New Jersey Antitrust Act. Holding that the delisting claim could be resolved as a matter of law based on an interpretation of the patent listing provisions of the Food, Drug, and Cosmetic Act, the court held that the patents were “improperly listed” in the Orange Book because they contained claims relating only to the inhaler and not to 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. Trinko540 U.S. 398 (2004) (Trinko), failure to comply with the law, the purpose of which is to help rivals, is not a basis for antitrust liability. The court rejected Teva’s argument and distinguished Trinkoexplaining that the Supreme Court declined to extend the antitrust duty to the action and found that Congress had granted the Federal Communications Commission the authority to enforce the relevant statute that the defendants had allegedly violated. In turn, the court held that antitrust claims arising from patent mislisting do not involve an extension of the antitrust doctrine and that there is no enforcement scheme to oversee Orange Book listings. In response to the decision, FTC Chairwoman Lina Khan, whose agency filed an amicus curiae brief supporting Amneal’s counterclaims, tweeted that “Pharmaceutical companies are being told they must remove their junk patent listings that undermine fair competition and inflate prices for essential medicines.” The case is Teva Branded Pharmaceutical Products R&D, Inc. against Amneal Pharmaceuticals of New York LLCNo. 23-20964 (SRC) (DNJ June 10, 2024).

The Court granted a motion to dismiss monopoly claims against Revlimid arising from its 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. and Bristol-Myers Squibb Co.’s motion to dismiss various claims alleging violations of state and federal antitrust laws and claims of unfair competition at the state level. Plaintiffs alleged, among other things, that Celgene monopolized the relevant market for Revlimid (and a related product) by preventing generic drug manufacturers from obtaining samples of the drug, thereby preventing the required bioequivalence studies necessary for ANDAs. Plaintiffs also alleged that Celgene entered into anticompetitive reverse payment agreements with various generic drug manufacturers to prevent those manufacturers from introducing competing products using the components of Revlimid and improperly restricted those competitors’ sales.

In dismissing the case, the court explained that while courts must consider the “mix of ingredients” allegedly supporting a monopoly claim, none of the ingredients in the alleged scheme were unlawful. From this perspective, the court found that Plaintiffs failed to sustain a claim based on Celgene’s refusal to sell samples to generic manufacturers because Celgene had no prior dealings with generic manufacturers and therefore had no obligation to supply 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, LLP540 U.S. 398 (2004), as well as recent decisions by the Sixth and Eighth Circuits, the court agreed with the defendants’ argument that they “cannot be held antitrust liable for refusing to deal with those generic competitors who did not obtain FDA approval of their testing protocols before requesting samples of Revlimid.” The generic competitors’ lack of FDA approval, the court found, provided a legitimate business justification for refusing to provide samples: the drugs are highly dangerous and subject to FDA regulation for distribution.

The Court similarly found Plaintiffs’ claims of reverse payment implausible because it found that Celgene’s waiver of royalty rights and the volume cap negotiations did not credibly transfer any value to the licensee. The Court found that Celgene was not obligated to collect royalties from the licensee at all, and “it is not even plausible that the volume-limited nature of the license, in and of itself,” constituted a guaranteed transfer of value to the licensee because the licensee could have restricted its own production in the absence of any litigation avoidance agreement. The case is In the matter of an antitrust dispute between the purchaser of Revlimid and Thalomid.CV No. 19-7532 (ES) (MAH) (DNJ June 6, 2024).

Court issues summary judgment in case Lipitor Reverse payment case based on causation. On June 6, Judge Peter Sheridan of the District of New Jersey, who is overseeing the case, Lipitor The multidistrict trial court granted summary judgment in favor of defendant Ranbaxy Laboratories on plaintiffs’ reverse payment claims. Ranbaxy filed its ANDA for generic Lipitor in 2002. After Pfizer sued for patent infringement, the parties reached a settlement in 2008 to allow Ranbaxy to launch generic Lipitor no earlier than November 30, 2011, five years before Pfizer’s patents expired. Plaintiffs challenged the settlement as an unjustified reverse payment that violated Sections 1 and 2 of the Sherman Act. In summary judgment, the court agreed with Ranbaxy that plaintiffs had failed to raise a genuine issue of material fact that it was more likely than not, but for the settlement, that the FDA would have completed its review of Ranbaxy’s ANDA even one day earlier. While plaintiffs argued that the selection of a November 30, 2011 licensed entry date set a timeline for FDA approval, the court found that FDA approval on that date was not, by itself, sufficient evidence that an earlier agreed entry date would have led to earlier FDA approval. The court noted that Ranbaxy had to meet significant regulatory requirements to obtain FDA approval, including the FDA’s invocation of the Application Integrity Policy (AIP) on February 25, 2009, due to concerns about one of its manufacturing facilities, which prevented the FDA from reviewing Ranbaxy’s ANDA until the FDA granted an exception on May 16, 2011. At that time, the FDA stated that it “anticipated” completing its review of the ANDA by November 30, 2011; this target timeline represented an “abstract discussion,” in the court’s view, not a guarantee or promise. The court also noted that despite the FDA’s knowledge of an agreement between Ranbaxy and Teva that would allow Teva to enter before November 30, 2011, the FDA had not approved Teva’s ANDA until then because of an investigation into Teva’s own manufacturing facilities. Considering the evidence, the court found that there was a strong likelihood of “cosmic coincidence” that the FDA approved Ranbaxy’s ANDA on the earliest possible date for launch, although it noted that there were “extremely unusual circumstances” in this case. The case is In the case of antitrust dispute concerning the drug Lipitor.No. 3:12-cv-2389 (PGS/JBD), (DNJ June 6, 2024).

European Commission announces first formal complaint against price-fixing pharmaceutical cartel. The European Commission announced on June 13 that it had filed a statement of opposition in its first pharmaceutical cartel case. The European Commission alleges that Indian company Alchem ​​International Pvt. Ltd. and its subsidiary set a “minimum selling price” for the active ingredient in abdominal cramp medicines Buscopan and its generic versions. The EU’s statement follows fines imposed in October 2023 on six other companies for price-fixing the same ingredient in the same alleged conspiracy — the other six settled with EU authorities in October 2023 for $14.4 million (€13.4 million) after admitting to coordinating to fix the selling price of the ingredient to common distributors and manufacturers. One of those companies, C2 Pharma, was not fined because it cooperated with European authorities and helped build their cases. The statement of opposition is not publicly available. The case is number AT.40636 before the Competition Division of the European Commission.

FTC files comment supporting USPTO proposed rule on disclosure of patent settlement agreements. The FTC submitted a comment on June 18 expressing support for a proposed rule by the Patent and Trademark Office (PTO) that would require parties to proceedings before the Patent Trial and Appeal Board (PTAB) to file all settlement agreements that terminate the proceedings. As the USPTO explained in its April 19, 2024 Notice of Proposed Rulemaking, one of the proposed rule changes expands the current statutory requirement that parties settling cases after the PTAB has initiated proceedings must file related settlement agreements. The proposed rule would require parties to file agreements reflecting the settlement at any time, even before the agency has initiated (i.e., agreed to continue) any case. Under 35 U.S.C. § 317(b), settlements filed with the PTAB must be made available to federal agencies upon written request.

The FTC’s commentary 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 the Justice Department. Congress expanded the MMA in 2018, the FTC explains, to require similar settlement filings for biologics and biosimilars. The FTC argues that the proposed PTO rule “would enhance the government’s ability to monitor and curtail potentially harmful and unlawful pre-establishment settlements,” which “accounted for more than half of all settlements in (America Invents Act) proceedings” before the PTAB.

The deadline for submitting comments on the proposed rule was June 18. PTO did not indicate when the planned change to the rule might come into effect.