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

Federal court allows Teva patents to remain in Orange Book. The Federal Circuit recently granted Teva Pharmaceutical’s motion to stay the removal of its patents from the Orange Book in its ongoing dispute with Amneal Pharmaceuticals, Inc. Listing patents on the Orange Book allows brand-name drugmakers to file patent infringement lawsuits to stop sales of proposed generic versions, which can then result in a 30-month hold on the FDA’s approval of the generic versions. The Federal Trade Commission (FTC) has warned of abuses of Orange Book listing and has urged Teva and other drugmakers to delist certain patents, including Teva’s inhaler patents. On June 10, 2024, Teva filed a motion to stay enforcement of the district court’s order requiring it to correct or remove certain patent information from the Orange Book while it appeals the order finding that Teva infringed Amneal Pharmaceutical’s patents. Teva argued that it would suffer irreparable harm if it were required to remove the patents because it would not be able to seek a 30-month injunction under the Hatch-Waxman Act. Amneal responded that it was “pure speculation” that Teva would not be able to seek a 30-month injunction and therefore could not show how it would be irreparably harmed. On July 10, 2024, the Federal Circuit granted the injunction in a two-page order, stating that “(b)ased on the record and our promptness in completing the brief and arguments on the merits, we conclude that a stay is warranted under the current circumstances of this case.” The stay will remain in effect “until further notice of this court.” The case is Teva Branded Pharmaceutical Products R&D, Inc. v. Amneal Pharmaceuticals of New York, LLCCase number 24-1936 (Fed. Cir. 2024).

FTC issues interim report on PBMs. On July 9, 2024, the FTC released an interim report on a study it began in 2022 of pharmacy benefit managers (PBMs) and their role as intermediaries between drugmakers and insurers. The report stated that enforcement agencies found that industry consolidation has led to six PBMs allegedly “controlling” 95% of all prescriptions in the United States. The report also stated that these PBMs “have enormous power and influence over patients’ access to medicines and the prices they pay.” The report also found that PBMs are responsible for inflating the prices of two cancer drugs — Gleevec and Zytiga — and Chairman Khan’s statement accompanying the report stated that “

State of Vermont sues PBMs. On July 17, 2024, the State of Vermont sued two PBMs and their subsidiaries for violating the Vermont Consumer Protection Act. Vermont alleges that the two PBMs gained “nearly complete control over the pricing, dispensing, and reimbursement systems for all prescription drugs for their” customers as a result of the “massive consolidation.” Vermont alleges that the defendants “engaged in deceptive conduct” in their trade, including by misrepresenting: (1) that their formulary design lowers the cost of prescription drugs; (2) that the payments they receive from manufacturers lower the cost of prescription drugs; and (3) by misrepresenting that formulary decisions are evidence-based or value-based decisions. Vermont also alleges that the defendants engaged in deceptive acts and practices, including by (1) using their market power to raise prices while excluding access to lower-cost drugs; and (2) patients have no choice but to pay inflated prices because the defendants have “nearly complete control over the pharmaceutical pricing chain.” The case is State of Vermont v. Evernorth Health, Inc. et al.Case number 24-cv-02759 (Vt. Sup. Ct.).

Denial of Class Certification in Litigation with Direct Purchaser of EpiPen. On July 1, 2024, a Minnesota district court denied recognition of the class action lawsuit Regarding the litigation with the direct purchaser of EpiPen. Plaintiffs Rochester Drug Co-Operative, Inc. and Dakota Drug, Inc. — two pharmaceutical wholesalers — allege that Mylan engaged in conduct that violated both the Racketeer Influenced and Corrupt Organizations Act and Section 2 of the Sherman Act. They sought certification as a class of pharmaceutical wholesalers who purchased EpiPens directly from Mylan. The court denied the motion for class certification. First, the court found that the plaintiffs failed to meet the numerical strength requirement of Rule 23(a)(1) because, after taking into account the statute of limitations, the class would have only 46 members. The court noted that “the paradigmatic class action involves many members with small claims …

Summary of judgment dismissed in contact lens antitrust case. On July 9, 2024, the court in the Middle District of Florida denied defendant Alcon’s motion for summary judgment on plaintiff Lens.com’s claims under the Sherman Act and the Clayton Act. Lens.com, a gray market contact lens retailer, advanced two theories of anticompetitive conduct, alleging: (i) a hub-and-spoke conspiracy among Alcon, a manufacturer of soft contact lenses, and other manufacturers, distributors, and suppliers of contact lenses; and (ii) a vertical conspiracy among Alcon, its distributors, and its suppliers. For example, Lens.com alleged that Alcon maintained a unilateral pricing policy agreement (PPA) among itself, its distributors, and its suppliers, that its suppliers monitored other suppliers’ violations of the PPA, and that its distributors enforced the PPA through do-not-sell lists. Lens.com alleged that Alcon placed it on the do-not-sell list because of alleged violations of the PPA. The court found that there were triable issues of fact concerning the existence of both a horizontal/hub-and-spoke conspiracy and a vertical conspiracy. The court also found that Lens.com argued that the facts were sufficient to support two relevant product markets: (1) the market for all contact lenses, because contact lenses and other forms of vision correction are not interchangeable; and (2) because of the unique situation of the alleged contact lens market, where patients are prescribed specific brands and models of contact lenses and cannot switch to other brands, the market for Alcon-branded contact lenses. The case is In the case of antitrust proceedings concerning disposable contact lenses. Case number 19-cv-706 (Md. Fla.).