Lawsuit Claims Gilead Made ‘Unlawful’ Payment Over Truvada Competition
A lawsuit filed on Thursday claims that Gilead made an “unlawful” payment to Cipla in exchange for Cipla’s agreement to not compete against Truvada. The complaint states the payment “likely” came in the form of a license to produce Atripla, a license to produce Hepatitis C drugs in India or both.
The complaint claims that this agreement “kept the price of Truvada at anticompetitive levels and harmed the health plans that pay for this drug on behalf of their members.
The complaint seeks relief based on several claims, including:
• Violation of section 1 of the Sherman Act, 15 U.S.C. § 1
• Violation of the Cartwright Act, Cal. Bus. & Prof. Code § 16720
• Violation of Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq.
• Restitution, money had and received, unjust enrichment, quast-contract and/or assumpsit
• Violations of state laws in Arizona, Connecticut, Florida, Hawaii, Iowa, Kansas, Maryland, Maine, Massachusetts, Michigan, Mississippi, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Dakota, Tennesee, Utah, Vermonti, West Virginia and Wisconsin
At question in the lawsuit is the practice of reverse payment patent settlements, which are sometimes referred to as “pay-for-delay” agreements. This is when a patent holder brings a lawsuit against an alleged infringer then agrees to pay the infringer in a settlement in exchange for the infringer ceasing its alleged infringing activity and ceasing disputing the patent’s validity.
The U.S. Supreme Court ruled in 2013 that the “Federal Trade Commission can sue pharmaceutical companies for potential antitrust violations” in response to these kinds of settlements.
The complaint argues that Gilead tried to sue Teva Pharmaceuticals for patent infringement regarding Emtricitabine, but when it looked like Gilead’s patents were in jeopardy, they settled with Teva, then settled with Cipla shortly after.
The complaint claims that the settlements with Teva and Cipla were part of “a pattern of bringing and then quickly settling patent infringement suits whenever a generic drug manufacturer files a Paragraph IV certification with respect to patents covering its HIV medications,” noting settlements with Aurobindo Pharma, Lupin Ltd., Mylan Inc., Hetero Drugs Ltd., Amneal Pharmaceuticals, Macleods Pharmaceuticals, Strides Pharma and Zydus Pharmaceuticals.
The lawsuit claims that consumers would have been able to pay less for Truvada or purchase lower-priced generic or co-packaged Truvada equivalents if it were not Gilead’s actions, estimating damages “at least in the hundreds of millions of dollars.”