The Interplay: Key Decisions at the Intersection of Antitrust & Life Sciences - March 2024

The Interplay: Key Decisions at the Intersection of Antitrust & Life Sciences - March 2024

Client Alert


Calls for Removal of Device Patents Listed in the Orange Book Continue. FTC and Congressional action scrutinizing allegedly “improper” Orange Book listings continued apace in the first few months of 2024. In an earlier edition of The Interplay, we detailed the FTC’s recent Policy Statement and its letters to ten pharmaceutical companies challenging over 100 patents that the FTC claimed were improperly listed in the Orange Book.

Following the FTC letters, on December 13, 2024, Senator Elizabeth Warren and Representative Pramila Jayapal wrote to eight pharmaceutical companies—AbbVie, Amneal, AstraZeneca, Boehringer Ingelheim, GlaxoSmithKline (GSK), Kaleo, Teva, and Viatris—asking whether they will de-list the patents the FTC claimed were improperly or inaccurately listed and to disclose whether they have taken action to enforce the patents. Similarly, on January 18, 2024, Senator Amy Klobuchar wrote six pharmaceutical companies—Abbvie, AstraZeneca, Boehringer Ingelheim, GSK, Mylan-Viatris, and Teva—urging them to remove patents that the FTC has claimed are improperly listed the Orange Book. Senator Klobuchar said the companies must remove the listings or otherwise “provide … a written explanation of why you believe each patent identified by the FTC is properly listed.”

Following the FTC and Congressional pressure, several of the companies—Impax, Kaleo, and GSK—voluntarily delisted some or all of the patents challenged, which relate to epinephrine autoinjection and inhaler products. 

Teva, however, has since asserted some of the patents the FTC challenged in its November 2023 letter as improperly listed, including assertions against generic inhaler manufacturers Amneal and Cipla. While Cipla has yet to respond to the complaint, Amneal has asserted counterclaims seeking an order compelling Teva to delist the asserted patents. On March 22, 2024, the FTC filed an amicus brief supporting Amneal. The FTC explained that it is has an interest in addressing improper Orange Book listings because they thwart competition from lower-priced generic drugs. The FTC argued that “device patents that do not mention any drug in their claims do not meet the statutory criteria for Orange Book listing,” and that a district court may compel delisting. The cases are Teva Branded Pharm. Prods. R&D, Inc. et al. v. Amneal Pharms of New York, LLC, et al., No. 2:23-cv-20964, and Teva Branded Pharm. Prods. R&D, Inc. et al. v. Cipla USA, Inc., et al., No. 2:24-cv-909, both in the District of New Jersey. 

Court Allows Claims to Proceed Against Teva for Allegedly Delaying Copaxone Generic Competition. On January 22, 2024, a court in the District of Vermont granted-in-part and denied-in-part Teva’s motion to dismiss a complaint alleging that Teva delayed and impaired competition from generic versions of its multiple sclerosis treatment, Copaxone. Plaintiffs alleged that Teva brought sham litigation against prospective generics, filed sham citizen petitions with the FDA to delay approval of the generics, and engaged in “product hopping” by allegedly attempting to coercively shift patients from its 20mg version of Copazone to a newly introduced 40mg product, all in violation of Sections 1 and 2 of the Sherman Act and state antitrust, consumer protection, and unjust enrichment law. The court declined to dismiss the sham litigation and sham citizen petition allegations based on the Noerr-Pennington doctrine, holding that it could not rule as a matter of law that Teva’s lawsuits and petitions were not sham. It also found that Teva’s alleged “product hopping” plausibly supported plaintiffs’ claims, even though Teva kept its original formulation on the market, because Teva allegedly undertook serial acts (including manipulating product pricing and pressuring pharmaceutical benefit managers) that could constitute coercion. The court, however, dismissed certain state-law claims. The case is Blue Cross and Blue Shield of Vermont et al. v. Teva Pharmaceutical Industries Ltd. et al., No. 5:22-cv-00159, in the District of Vermont.

Court Grants Summary Judgment in Invisalign Antitrust Suits. On February 21, 2024, a court in the Northern District of California granted summary judgment for Align Technology (Align) on a refusal-to-deal claim brought by classes of direct orthodontist purchasers and indirect purchaser consumers of Invisalign. Plaintiffs alleged that they paid artificially inflated prices because Align—which supplies Invisalign teeth aligners and iTero intraoral scanners—excluded competition by terminating an interoperability agreement under which Align accepted scans from 3Shape’s intraoral scanner to produce Invisalign aligners. The court found that no reasonable jury could find that the agreement was not based in part on legitimate business reasons. The court observed that the case was a difficult one because of evidence that Align was motivated, in part, by a desire to harm an emerging competitor, and that Align knew its conduct would diminish its own profits in the short-term. But the court held that plaintiffs failed to overcome the presumption that protecting patent rights is a legitimate business justification. The ruling does not apply to a separate Section 1 suit alleging a restraint of trade brought by a proposed class of Smile Direct Club purchasers, which remains in discovery. The case is Simon and Simon, PC v. Align Tech., Inc., No. 20-cv-03754-VC, in the Northern District of California.

Court Declines to Dismiss Monopoly Claims Against Two Hospital Companies. On February 21, 2024, a court in the Western District of North Carolina denied motions to dismiss a complaint asserting Section 1 and 2 Sherman Act claims based on an alleged anticompetitive scheme to maintain and enhance monopoly power in healthcare services markets in Western North Carolina. The plaintiffs allege that defendants HCA Healthcare and its subsidiary, Mission Health Systems, illegally excluded rival providers by requiring health insurance plans to accept “all-or-nothing” provisions, under which the plans must cover all of HCA’s acute care and outpatient services; “anti-steering” provisions, under which plans are prohibited from encouraging members to use less expensive or higher quality providers; and “gag clauses” preventing plans from revealing agreement terms. The court rejected the challenge to the Section 1 claim, holding among other things that plaintiffs had sufficiently alleged the “types of provisions” and facts giving rise to an “inference that [the] contracts actually contain such provisions” and plausibly alleged harm to competition. The court also rejected the challenge to the Section 2 claim, holding that plaintiffs had adequately alleged anticompetitive conduct after the expiration of a state law that had effectively granted Mission a monopoly. The case is In re Mission Health Antitrust Litigation, No. 1:22-cv-114-MR, in the Western District of North Carolina.

Court Dismisses NY AG Drug Rebate Tying Claims against CVS. In a bench ruling on March 5, 2024, New York Supreme Court Justice Robert R. Reed dismissed an amended antitrust complaint filed by the New York Attorney General accusing CVS of illegal tying in a market for 340B drug rebates. The State alleged that CVS violated New York antitrust laws by tying its hospital contracts to the use of its subsidiary, Wellpartner LLC, for processing certain federal government rebates. The court found that the State failed adequately to allege that CVS had sufficient market power to force hospitals into using both of its services, observing that publicly available data show that about 86% of hospitals in the relevant rebate program do not contract with CVS, and that plaintiff failed to show why CVS pharmacies are differently situated than other pharmacies in the same region. The case is New York v. CVS Pharmacy Inc., No. 452253/2023, in the Supreme Court of the State of New York, County of New York. 


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