CVS, Rite Aid and Others Sue Wyeth and Teva Pharmaceuticals in New Jersey District Court
This is an antitrust lawsuit alleging that Wyeth schemed to maintain a monopoly and delay the entry of generic versions of Effexor XR, including an unlawful agreement between it and Teva. The Plaintiffs are alleging the scheme included fraudulently procuring patents, wrongfully listing them in the FDA Organge Book, bringing serial sham litigation to block and delay generic entry, entering into price-fixing with Teva to delay entry of the generic, and negotiating settlements to preserve and protect the purported monopoly and the alleged market-agreement negotiated with Teva. The case was filed today and a copy of the complaint can be found here: Rite Aid et al. v. Wyeth – No. 12CV03523.
When the FDA approves a brand name manufacturer’s New Drug Application (NDA), the manufacturer may list any patents that the brand manufacturer believes could reasonably be asserted against a generic manufacturer who makes, uses, or sells a generic version of the brand name drug prior to the expiration of the listed patents in the Orange Book. This must be done within 30 days of NDA approval.
When a generic manufacturer seeks approval to sell a generic version of a brand name drug, they can file an abbreviated new drug application (ANDA), and if it is a bioequivalent, the FDA assigns it an “AB” rating. To obtain the FDA approval of the ANDA, a certification is required that it will not infringe any patents listed in the Orange Book. This gives the brand name manufacturer the ability to initiate a patent infringement suit within 45 days of receiving notification of the certification, and the FDA will wait the earlier of 30 months or until a court issues a non-infringement decision. The FDA can grant tentative approval, but cannot authorize the generic to go to market beforehand. The first to file an ANDA, gets a period of protection from competition with other generic versions for at least six months.
The Plaintiffs in this case are essentially saying that Wyeth tried to gain broader exclusivity by defrauding the PTO. The Plaintiffs further allege that Teva filed an ANDA back in 2002, and Wyeth sued Teva in 2003 for infringement, and Plaintiffs claim that this led to a “pact” to form a conspiracy in late 2005, through which Wyeth gave Teva an exclusive license to sell a generic version before the patent expired; Wyeth would both forgo marketing its own authorized generic drug during the period and allow Wyeth’s generic to come to market early. Furthermore, the Complaint alleges that with Wyeth’s permission, Teva obtained FDA approval and began selling a generic over a year and a half before it otherwise could have. The Plaintiffs allege that Teva agreed to delay the launch of generic Effexor XR until two years after the expiration of the only Wyeth patent capable of blocking generic competition to Effexor XR. From Teva’s point of view, Wyeth agreed to refrain from selling an authorized generic during the license period, which allowed Teva to maintain a relatively high generic price as the only generic manufacturer on the market at the expense of Plaintiffs and generic purchasers generally. In essence, the Plaintiffs are saying that the agreement between Teva and Wyeth was structured to encourage Wyeth to resolve challenges to certain patents prior to a court finding of invalidity, non-infringement, or unenforceability, and gave Wyeth an incentive to resolve generic cases without a finding of invalidity, non-infringement or unenforceability. Plaintiffs argue that Wyeth cannot insulate itself from liability for the anticompetitive effects of its fraud on the PTO by bringing lawsuits that it knew it would lose and settling them before a decision on the merits. The suit brings claims for unlawful monopolization and unlawful conspiracy in restraint of trade.
To my knowledge, the attorney for Plaintiffs, Barry L. Refsin, has been involved in two cases (one reported, one unreported) in the last 3 years, both involving antitrust. One of the cases, direct purchasers of mushrooms brought antitrust action against a mushroom cooperative alleging illegal scheme to artificially inflate prices. I know that case was has been very contentious and lengthy. An interlocutory appeal for an exemption from the antitrust laws was denied in 2011, and the case was brought in 2006. The other case was also in New Jersey where Barry Refsin represented CVS and Rite Aid asserting the Warner-Lambert Company LLC and Pfizer Inc. violated antitrust laws by using patents for or related to gabapentin to block generic competition for Neurontin. In that case, it was held that the purchasers sufficiently alleged that they suffered an antitrust injury in the form of overcharges on their purchases of gabapentin and that such injuries flowed from the maker’s unlawful conduct, and that the makers had an overall scheme to monopolize the market by forestalling, if not preventing, generic competition. This was has also been contentious and lengthy. The case was brought in 2002 and in a 2011 appeal, the District Court affirmed an order of a magistrate judge on issues related to the case in Refsin’s favor.
The case related to Neurontin that Refsin has been involved with is cited to in materials as recently as this year for advanced deposition tools, skills and challenges. Specifically, that a certain kind of deposition notice is designed to prevent a situation in which a series of corporate employees sit for deposition and each disclaims personal knowledge of a matter regarding which someone within the corporation (or the corporation itself) must have knowledge. On the other hand, that case has also been discussed in academic circles analyzing the scope of the attorney work product doctrine, which may be overcome sometimes by showing a substantial need and undue hardship, as the defendants were able to do in that case.