A US judge last week ruled that plaintiffs plausibly claimed harm from Irish drugmaker Allergan’s alleged attempts to block market entry of a generic dry-eye medication.
In denying Allergan’s bid to kill the lawsuit, Judge Nina Gershon said the Food and Drug Administration’s responses to the company’s attacks on the agency’s guidelines for the approval of a generic form of the drug Restasis fell “far short” of showing Allergan’s three petitions were not baseless or otherwise overcoming the plausibility of plaintiff’s claims.
“Whether Allergan can convince a jury of this remains open. But its arguments that plaintiffs' allegations are implausible, and that the court should dismiss the case for failure to plead causation, are meritless,” wrote the judge from the US District Court for the Eastern District of New York.
Separate classes of direct purchaser and end-payor plaintiffs claim Allergan committed a series of anticompetitive actions to protect its monopoly on its patented eye drop medication, Restasis. Allergan launched the medication in 2003 and has since battled to maintain the exclusive rights to sell the drug that brings in about $1 billion a year.
At least five generic drugmakers submitted paperwork for a generic version of the drug by the start of 2014, and they allege Allergan’s improper behaviour is the reason name-brand Restasis still hold 100% of the market.
The plaintiffs accuse Allergan of filing three sham citizen petitions to the FDA to which the agency is required to respond; of defrauding the US Patent and Trademark Office into issuing second-wave patents by submitting false information; and of wrongfully listing those patents in the Orange Book of valid patents.
This conduct enabled Allergan to file sham patent infringement lawsuits that are accompanied by a 30-month automatic stay on FDA approvals on generic rivals, the plaintiffs allege.
Allergan also attempted to avoid invalidation of its patents by selling them to the Saint Regis Mohawk Tribe in an attempt to acquire tribal sovereign immunity. The plaintiffs claim the tactics were intended to further delay the generics, and the patent transfer to the tribe drew ire from the head of the Department of Justice’s antitrust division, Makan Delrahim.
Judge Gershon said that for the sake of the motion to dismiss, Allergan admitted: “it deliberately and repeatedly attempted to obstruct the entry of generics into the marketplace for Restasis”.
But with this granted, the judge said the plaintiffs’ claims, that Allergan was able to maintain a monopoly as a result of its actions, “are logical and amply support the plausibility requirement”.
Allergan’s citizen petitions are not protected by the First Amendment and thus not immune from antitrust liability, Judge Gershon wrote, finding that the plaintiffs had plausibly argued them as shams by fulfilling the two-pronged test set forth in the Supreme Court’s Professional Real Estate Investors v Columbia Pictures precedent.
Counsel to Allergan had argued that the plaintiffs’ claims did not satisfy the “objectively baseless” prong of the test, in part because the FDA had granted sections of two of the petitions, and that the regulator had at least considered revisions to its guidelines due to Allergan’s petitions.
Judge Gershon rejected this argument, finding that the FDA had only granted requests to exchange information about its methodology but ultimately refused to change that methodology.
Allergan had also contended that the FDA had never granted tentative approval to the generic drug applications before the 30-month stay had ended, as it could have. Judge Gershon found plaintiffs’ response – that the FDA could have feared litigation and lacked enough resources to respond – a plausible explanation of the regulator’s inaction.
The judge said she would address in a separate order Allergan’s motion to dismiss end-payor plaintiffs’ state law claims for failure to state a claim.
The original version of the article and further in-depth coverage of the Allergan case can be accessed via PLN’s sister publication Global Competition Review.
Counsel to Allergan
Ward Smith & Hill
Jack Wesley Hill in Longview, Texas
Gibson Dunn Crutcher
Jason McKenney and M Sean Royall in Dallas; Matthew Cameron Parrott in Irvine, California; Richard Hale Cunningham in Denver; Eric Stock in New York
Counsel to direct purchaser plaintiffs
The Dungan Law Firm
James R Dungan in New Orleans
Hagens Berman Sobol Shapiro
Thomas M Sobol in Cambridge, Massachusetts
Counsel to end-payor plaintiffs
Zwerling, Schachter & Zwerling
Dan Drachler in Seattle
Lieff Cabraser Heimann & Bernstein Eric B Fastiff in San Francisco
Joseph Saveri Law Firm
Joseph R Saveri and Steven N Williams in San Francisco