[Ip-health] Stat+: A judge rules AbbVie is ‘immunized’ from antitrust claims over its Humira patent dealings

Thiru Balasubramaniam thiru at keionline.org
Mon Jun 15 00:50:00 PDT 2020


A judge rules AbbVie is ‘immunized’ from antitrust claims over its Humira
patent dealings
By ED SILVERMAN @Pharmalot
JUNE 9, 2020

In a victory for AbbVie (ABBV), a U.S. federal judge ruled the drug maker
did not unfairly thwart competition by striking deals with other companies
that resolved patent lawsuits, but also resulted in delaying lower-cost
biosimilar versions of its Humira medicine for several years.

A lawsuit filed last year by unions, insurers and the city of Baltimore
alleged that AbbVie “abused the patent system” and “erected significant
barriers to entry to block biosimilar competition” by filing dozens of
patents for Humira, its franchise product. Some of the more than 100 Humira
patents — sometimes described as a “patent thicket” — extend to 2034.

Over the past few years, AbbVie also settled patent lawsuits filed by
several other drug makers – including Pfizer (PFE) and Amgen (AMGN) – that
sought to sell biosimilar versions of Humira, a rheumatoid arthritis
treatment, in the U.S. A biosimilar is a nearly identical variant of a
brand-name biologic medicine that yields the same health outcome, but at a
lower cost.

The lawsuit was the first attempt to accuse a drug maker of
anti-competitive behavior by relying on a pay-to-delay scenario. Under such
arrangements, a brand-name drug company offers cash or something else of
value in exchange for delaying the launch of a lower-cost generic version
of its medicine. The U.S. Supreme Court has ruled some deals deserve
anti-trust scrutiny.

The lawsuit argued AbbVie dealt a one-two punch to thwart competitors —
filing numerous patents on various formulations and uses for Humira and
knowing that patent litigation under such circumstances is time-consuming
and expensive for other drug makers to pursue. These companies could either
proceed with litigation or reach settlements that delay product launches in
the U.S.

However, the patent settlements restricted the other drug makers from
selling biosimilar versions of Humira in the U.S. until 2023, although the
companies were permitted to launch in Europe. And the stakes are high. Last
year, Humira generated more than $18.4 billion in the U.S., and 8.6%
increase. Put another way, Humira sales in the U.S. accounted for nearly
45% of companywide revenue in 2019.

The unions, insurers and Baltimore officials contended they spent money
unnecessarily because the primary Humira patent expired in 2017 and
lower-cost biosimilar versions should have become available sooner. The
lawsuit quoted a Wall Street analyst who calculated a 9.7% price increase
for Humira in 2018 cost the U.S. health care system roughly $1.2 billion.

But U.S. District Court Judge Manish Shah disagreed.

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In a 73-page ruling issued on Monday, Shah wrote that “AbbVie has exploited
advantages conferred on it through lawful practices and to the extent this
has kept prices high for Humira, existing antitrust doctrine does not
prohibit it… the vast majority of the alleged scheme is immunized from
antitrust scrutiny, and what’s left are a few sharp elbows thrown at
sophisticated competitors participating in regulated patent and
biologic-drug regimes.”


One former Federal Trade Commission official contended the ruling was

“The reason [God] created courts of appeal is because district court judges
make mistakes and this judge did just that in suggesting that AbbVie’s
conduct is immunized,” said David Balto, a former assistant director of
policy and evaluation at the FTC, who more recently represented a coalition
of consumer groups and unions that argued AbbVie’s acquisition of Allergan
would thwart competition.

“For years, courts have recognized intellectual property is not different
from other property. This judge wants to place it in a sacrosanct category
that is inconsistent with the law. To say it is immunized is to say it is
protected from the conduct of the free market and courts are extremely
reluctant to immunize conduct too readily.”

“Patent games have evolved. Antitrust law needs to keep pace,” said Robin
Feldman, a professor at the UC Hastings College of Law and director of the
Center for Innovation, who has written “Drugs, Money & Secret Handshakes:
The Unstoppable Growth of Prescription Drug Prices.’

“In this case, as in others, pharmaceutical companies have developed a
variety of interlocking behaviors to maintain monopoly pricing for an
additional period of time. It is the combined effects of these behaviors in
the particular context of the pharmaceutical industry that harms consumers
and competition,” she continued. “The AbbVie decision, unfortunately, sends
the message that complexity wins. Hiding patent games in enough convoluted
layers can succeed.”

[The headline in this post was updated to note the judge ruled AbbVie is
‘immunized’ from antitrust liability.]

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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