Allergan Restasis Antitrust
ABOUT THE CASE
Hagens Berman filed a class-action lawsuit against Allergan alleging the company unlawfully prolonged its monopoly in the market for prescription cyclosporine emulsion (Restasis), reaping profits illegally via a multifaceted, anticompetitive scheme. The lawsuit seeks to represent any entity that purchased Restasis directly from Allergan, and to recover damages (plaintiffs' overcharges), which can be tripled under federal antitrust laws.
The complaint alleges that, in 1995, Allergan was issued the U.S. Patent No. 5,474,979, protecting its drug, Restasis, used to treat dry eye. Allergan made about $3.3 billion from selling Restasis in the U.S. for 11 and a half years while it was protected by this patent, but, allegedly, Allergan was not satisfied with its legitimate blockbuster earnings; it wanted more.
According to the complaint: Allergan’s unlawful scheme included defrauding the PTO by presenting old data as new and falsely claiming surprising efficacy, wrongful listing invalid patents in the FDA's Orange Book, submitting a series of baseless FDA petitions, and conspiring with a Native American tribe to try to prevent courts and the PTO from invalidating the patents by agreeing to sell the invalid patents to the Tribe. The plaintiffs claim that Allergan's actions delayed would-be generic competition for prescription emulsion cyclosporine. To date, Allergan earned an extra $3.9 billion in monopolistic Restasis sales its legitimate patent protection ended, at direct purchasers’ expense.
DRUG COMPETITION AND PATENTS EXPLAINED
Brand drug companies can, and do, obtain valid patents that cover new prescription drug products. Once the lawful periods of patent exclusivity expire on branded products, would-be competitors can seek FDA approval to sell generic versions of the brand, allowing those companies to manufacture generic products that are just as safe and effective, but far less expensive than the brand.
Brand companies are required to provide the FDA information about patents claiming their particular drug product. The FDA must rely, completely, on the information provided by the brand and list those patents publicly, so that would-be generic competitors understand the scope of the brand’s ostensible patent protection. Branded drug companies have a statutory period of time to charge very high prices for medications that, in fact, cost little to manufacture. But it is a limited period, after which would-be competitors may enter the market with lower-cost substitutes.
To combat error, Congress created the "inter partes review" process that allows the Patent and Trademark Appellate Board (PTAB) to review the validity of previously issued patents. Rules are in place to hold brand drug companies to pursuing only valid patents with the Patent and Trademark Office. Drug companies cannot provide false information to the FDA to impede cheaper generic options. Rules also prohibit the filing of patent infringement lawsuits against would-be generic competitors when those suits have no merits, as the filing of those suits in effect delays market entry for generics.
ALLERGAN BROKE THE RULES
The plaintiffs allege that, in a scheme directly intended to delay would-be generic competition and continue its Restasis monopoly, Allergan broke all of these rules and more. According to the complaint, Allergan presented old data as new, jerry rigged the old data to falsely claiming "unexpected" results; tricked the PTO into granting a second wave of patents; filed multiple sham patent infringement suits to delay generic entry; and, allegedly, even attempted to evade enforcement of these rules by entering into a contract with a Native American tribe to transfer ownership of the second wave of Restasis patents to the tribe -- then petitioning the PTAB and the court to dismiss their reviews of the invalid patents for lack of jurisdiction.
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