The Wall Street Journal recently reported that although FDA approvals for generic drugs have reached “record numbers” in recent years, many of these less expensive alternatives to brand-name drugs have struggled to hit the market. This is not because of supply issues or natural barriers to entry: it is because brand-name drug manufacturers use calculated, often illegal, measures to keep them out.
The Wall Street Journal acknowledged that one way brand-name drug manufacturers stifle competition is through reaching patent litigation settlement deals wherein generic manufacturers agree to delay generic entry, but the generic manufacturer “still can benefit by being paid by the branded companies to stay off the market.” This is known as a "pay-for-delay" deal, and the antitrust laws forbid such an arrangement. Faruqi & Faruqi has been at the forefront of combating these deals, recently helping achieve a $750 million settlement against Forest Laboratories (now Allergan) for allegedly engaging in this practice.
Beyond pay-for-delay deals, brand-name drug manufacturers use other means to achieve generic delay. As the Wall Street Journal noted, this includes “adding patents to products, while suing generic drugmakers for allegedly infringing the patents.” This tactic is known as creating a "patent thicket," and has become increasingly popular. For example, the Wall Street Journal reported that Enbrel, a rheumatoid-arthritis treatment, has over 40 patents covering it. Humira, a blockbuster drug that treats a variety of conditions, is "shielded from competition by more than 100 patents" according to Bloomberg. These additional patents usually don’t cover a drug’s active chemical ingredients, but rather “are known as secondary patents that cover a drug’s formulation or delivery” according to the Wall Street Journal.
Drug purchasers have begun to take notice of these “patent thickets.” In March of this year, a group of “indirect purchasers” (i.e. health benefit plans) sued AbbVie, the maker of Humira, alleging that its patent thicket on the drug violates antitrust law.
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Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour, personal injury and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Delaware, Georgia and Pennsylvania.
Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, direct purchasers, consumers and employees.
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About David Calvello
David Calvello is an Associate in Faruqi & Faruqi, LLP's New York office. He mainly practices in the area of antitrust litigation with a focus on competition in the pharmaceutical industry. He has worked on multiple cases that resulted in significant settlements, including In re Lidoderm Antitrust Litigation, 14-md-02521 (N.D. Cal.) ($166M settlement) and In re Solodyn Antitrust Litigation, 14-md-02503 (D. Mass.) ($76M settlement).