Health Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Teva’s antitrust claims over Cushing syndrome drug mostly survive dismissal, (May 12, 2026)

By Kenneth H. Ryesky, M.B.A., J.D.

Although an exclusive dealing arrangement by a proprietary pharmaceutical manufacturer with a dispensing pharmacy has been discontinued, that pharmacy remains contractually obligated to not carry the generic equivalent drug.

The federal district court in San Jose, California has mostly sustained the third amended complaint of generic drug manufacturer Teva against proprietary drug manufacturer Corcept. Teva Pharmaceuticals USA, Inc. alleged that Corcept Therapeutics, Inc. entered into an arrangement with Optime Care Inc., the specialty pharmacy that distributes Korlym. Corcept distributes Korlym exclusively through Optime, and Optime was allegedly contractually prohibited from distributing any competing products, including generic versions of Korlym. Corcept moved to dismiss a third amended complaint as it was a verbatim recitation of its previously dismissed litigation and that omnibus state law claim failed for want of standing and other factual predicates. The court held that, at this stage, the allegations were sufficient to allege the requisite injury, causal connection, and redressability to confer Article III standing for the state law claims. However, the state law claims were dismissed insofar as they addressed alleged kickback payments to prescribing physicians (Teva Pharmaceuticals USA, Inc. v. Corcept Therapeutics, Inc., No. 5:24-cv-03567-NW (N.D. Cal. May. 5, 2026)).

Background. Cushing syndrome is a rare human malady caused by persistent overabundance of cortisol and/or other glucocorticoid hormones. Some of the disease's sequelae are treated with mifepristone (a drug that has controversial applications when used in combination with others to induce pregnancy terminations). Corcept Therapeutics, Inc. (Corcept) held the proprietary rights in Korlym®, the standalone version of mifepristone approved to treat Cushing syndrome and duly designated as an orphan drug.

Generic drug manufacturer Teva Pharmaceuticals USA, Inc. (Teva) filed a lawsuit alleging that Corcept entered into an agreement with specialty pharmacy Optime Care Inc. (Optime) whereby Optime was the sole distributor of Korlym® and was contractually barred from distributing generic mifepristone and other competing products, a practice described by the court as an "arrangement to end-run state generic substitution laws designed to promote generic drug use."

During the pendency of the litigation, Teva noted that Corcept had discontinued its relationship with Optime and entered into a similar exclusive dealing agreement with a specialty pharmacy called Curant Health (Curant). The court ruled that the litigation was too advanced to bring in Curant as an additional defendant, but allowed Teva to file a third amended and supplemental complaint (TASC) that included claims in connection with the Curant relationship against Corcept alone.

Corcept and Optime jointly moved to dismiss Teva's Second Amended Complaint as applied to the allegations in the TASC, and also submitted supplemental briefs addressing the deficiencies in the TASC itself.

Dismissal of Second Amended Complaint. The court mostly denied dismissal of the Second Amended Complaint. The monopolization and attempted monopolization claims that were reasserted verbatim by Teva had been dismissed by the court, but were not stricken. Teva had the right to reassert those claims.

Teva's original state law claim "consist[ed] solely of a few paragraphs and a list of 48 different antitrust and competition statutes and 37 consumer protection statutes." The court had found these to be "woefully insufficient to meet the standards" of Fed. R. Civ. P. 8. Teva pared this allegation down to 21 state antitrust statutes, and set forth more detailed particulars. On this, Corcept and Optime attacked Teva's standing based upon state-specific requisites over and above those for federal Article III Sherman Act standing; specifically, Corcept and Optime contended that state law standing must entail residency and/or injury within the state. This, the court noted, is a class action plaintiff concept and not necessarily applicable to single manufacturer such as Teva as a non-class action plaintiff bringing its "own claims on its own behalf based on its own injuries."

Additionally, the court followed the majority of diverse courts in ruling that the intrastate commerce requisites in laws of D.C., Massachusetts, Michigan, Missouri, North Carolina, South Dakota, West Virginia, and Wisconsin are fulfilled by pleading "nationwide antitrust violations, the antitrust impact of which was felt within each state."

The court did, however, dismiss the claims under the Kansas and Ohio laws to the extent that they were based upon alleged kickback payments to prescribing physicians.

Deficiencies. The court found that the TASC pleadings were plausible. Corcept and Optime argued that there was an inconsistency between Teva's allegation that Optime was the only practical route to bring Korlym® to the patient and the allegation that the Corcept-Optime arrangement had ended and the pathway to the patient is now through non-party Curant. Teva's exclusive dealing claim against Optime, asserted Corcept and Optime, was thus unsustainable. The court found that Teva had alleged foreclosure of competition that caused substantial harm in the form of supracompetitive prices.

The prescription medications market has its peculiarities. Competition on a drug-by-drug basis is heavily impacted by the FDA approval process, and by special procedures and rules regarding pharmaceutical patents. The ethical and law-abiding physician who prescribes the medication should have no interest in which pharmacy fills the prescription. The court here agreed that "competition through state drug substitution laws is the only cost-efficient means of competing available to generic manufacturers." Giving regard to the realities of the prescription drug market dynamics, the court found that the allegations were plausible and declined to dismiss.

The Case is No. 5:24-cv-03567-NW.

Judge: Wise, N.

Attorneys: Devora Allon (Kirkland and Ellis LLP) for Teva Pharmaceuticals USA, Inc. Adam Bryan Wolfson (Quinn Emanuel Urquhart Sullivan LLP) for Corcept Therapeutics, Inc.

Companies: Teva Pharmaceuticals USA, Inc.; Corcept Therapeutics, Inc.

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