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From Antitrust Law Daily, March 19, 2019

AbbVie facing first-of-its-kind ‘patent thicket’ antitrust suit

By Nicole D. Prysby, J.D.

A welfare benefit fund has filed antitrust claims against Humira® manufacturer AbbVie Inc., and a number of its competitors, alleging that AbbVie created a "patent thicket" by applying for a number of patents for Humira since the drug was developed, as a means to block competition in the U.S. market.

An employee welfare benefits fund has filed an antitrust class action against AbbVie Inc., manufacturer of Humira®, and a number of the company’s competitors alleging that AbbVie created a "patent thicket" by applying for a number of patents for Humira since the drug was developed, as a means to block competition in the U.S. market. AbbVie then, the complaint alleges, pursued infringement litigation against biosimilar manufacturers attempting to bring a biosimilar for Humira to market. The bulk of the competitors sued by AbbVie over adalimumab biosimilars opted to settle patent claims. The complaint alleges that AbbVie entered into unlawful market division agreements with the biosimilar manufacturers, which permit competition in Europe, but which delay biosimilars in the U.S. market until at least January 2023 (UFCW Local 1500 Welfare Fund v. AbbVie Inc., March 18, 2019).

Plaintiff UFCW Local 1500 Welfare Fund, on behalf of itself and all others similarly situated, filed a complaint against AbbVie Inc., AbbVie Biotechnology Ltd. (AbbVie), Amgen Inc. (Amgen), Samsung Bioepis Co., Ltd. (Bioepis), Mylan Inc., Mylan Pharmaceuticals, Inc. (Mylan), Sandoz, Inc. (Sandoz), Fresenius Kabi USA, LLC (Fresenius), Pfizer Inc. (Pfizer), and Momenta Pharmaceuticals, Inc. (Momenta), alleging violations of federal antitrust laws and state antitrust, consumer protection, and state common laws.

The claims arise from the Defendants’ alleged anticompetitive scheme to restrain competition in the market for Humira® (a biologic injectable therapy indicated to treat a variety of chronic conditions, including rheumatoid arthritis) and its biosimilar (adalimumab) competitors in the U.S. According to the complaint, Humira is the best-selling prescription drug in the world with over $130 billion in total sales, and the single largest revenue source for AbbVie. Per patient costs doubled from $19,000 per year in 2012 to more than $38,000 in 2018 (after rebates). Other pharmaceutical manufacturers have attempted to launch generic versions of Humira, but have failed, due to the "patent thicket" erected by AbbVie as well as AbbVie’s alleged illegal market division agreements with other Defendants. AbbVie’s scheme to keep out biosimilar competition has cost the U.S. healthcare system billions of dollars. For example, Wells Fargo analyst David Maris calculated that AbbVie’s 9.7% price hike on Humira in 2018 cost the country’s healthcare system approximately $1.2 billion. AbbVie’s patent thicket was the subject of a recent U.S. Congressional investigation into overpriced drugs.

The primary patent for Humira expired in 2016. The complaint alleges that AbbVie has applied for a number of patents since the drug was developed—collecting dozens and dozens of patents, many of which are overlapping and non-inventive—as a means to block competition in the U.S. market. To carry out its patent thicket scheme, AbbVie has pursued "infringement" litigation against biosimilar manufacturers. Only one biosimilar manufacturer—Boehringer—has continued to litigate against AbbVie in an effort to launch its biosimilar earlier in the U.S. In August 2017, just weeks before Boehringer received FDA approval for its biosimilar, AbbVie filed an infringement lawsuit asserting that Boehringer’s biosimilar would infringe approximately 1,600 claims from among different AbbVie patents. Although many of the documents for that lawsuit are sealed those available publicly reveal anticompetitive conduct. For example, AbbVie alleges infringement of three patents that the Patent Trial and Appeal Board has already found unpatentable.

Seven competitors previously sued by AbbVie over adalimumab biosimilars have opted to settle patent claims. The complaint alleges that AbbVie then entered into unlawful market division agreements with the biosimilar manufacturers, which permit competition in Europe, but which delay biosimilars in the U.S. market until at least January 2023. Under the agreements, AbbVie has maintained its monopoly in the U.S. market and continues to charge inflated prices—capturing nearly $20 billion in 2018 revenues—while allowing biosimilars to sell in the European market, where drug prices and profits are generally much lower.

The complaint alleges a Sherman Act § 1 claim, a Sherman Act § 2 claim, and state law claims for conspiracy and combination in restraint of trade, monopolization, state consumer protection law violation, and unjust enrichment. The complaint asserts that the conduct is per se unlawful, but that if it is subject to the Rule of Reason analysis, the relevant product market is adalimumab, including branded Humira and its biosimilars. The relevant geographic market is the U.S., including its territories, possessions, and the Commonwealth of Puerto Rico. The lawsuit seeks injunctive and monetary damages on behalf all persons and entities that indirectly purchased, paid, and/or provided reimbursement for some or all of the purchase price of Humira from AbbVie in the U.S., beginning at least as early as January 1, 2017.

Attorneys: Brian M. Hogan (Freed Kanner London & Millen LLC) for UFCW Local 1500 Welfare Fund.

Companies: Abbvie Inc.; AbbVie Biotechnology Ltd.; Amgen Inc.

MainStory: TopStory Antitrust IllinoisNews

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