Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ill.: Biogen Tecfidera-PBM rebate antitrust MDL dismissed, (Jun 26, 2025)

By Martin A. Steinberg, J.D.

Biogen allegedly paid substantial rebates and service fees to CVS Caremark, Express Scripts, and OptumRx to block the low-cost generic dimethyl fumarate from favorable formulary tiers, then steered physicians and patients to its patent-protected successor drug, Vumerity.

The federal court in Chicago dismissed, without prejudice, a multidistrict complaint by health—plan sponsors who alleged Biogen, Inc., paid the three dominant pharmacy—benefit managers (PBMs) CVS Caremark, Express Scripts and OptumRx to keep low—priced generics of Biogen’s multiple—sclerosis (MS) drug Tecfidera off favorable formulary tiers, even after generics entered at roughly $17 per pill versus Tecfidera’s $132, and then steered patients to Biogen’s newer, patent—protected brand Vumerity. The court held that the pleading did not plausibly show that the rebate-for-tiering arrangements foreclosed a substantial share of the dimethyl fumarate market or that plans lacked practical alternatives to PBMs’ allegedly tainted formularies, thereby undermining the exclusive-dealing theory. Nor did the plaintiffs allege the coercive conduct required for a “product—hop” claim, because Tecfidera remained available and no deceptive switch tactics were detailed. The Robinson-Patman commercial bribery count failed due to the lack of a fiduciary relationship between PBMs and plans. Finding the antitrust and state—law claims insufficient but potentially curable, the court granted leave to amend by August 20, 2025 (In Re Tecfidera Antitrust Litigation, No. 1:24-cv-07387 (N.D. Ill. June 25, 2025)).

Background. In 2013, the FDA approved Biogen’s dimethyl fumarate drug, Tecfidera, for the treatment of MS. The plaintiffs allege that Tecfidera was a “lifesaving and life-altering drug” and a “must-have for any formulary.” Between 2015 and 2019, Biogen generated approximately $3 billion in annual U.S. sales of Tecfidera. During that time, Tecfidera was protected from generic competition by a patent. However, beginning in 2017, the patent came under legal scrutiny; by mid-2020, it had been invalidated. In August 2020, the FDA approved an ANDA filed by Mylan Pharmaceuticals for a generic version of Tecfidera, which went to market shortly thereafter. Several other generic versions entered the dimethyl fumarate market in the months that followed. The effect of these entries on price was dramatic. Within seven months of entering the market, generic dimethyl fumarate was selling for as low as $17 per pill compared to Tecfidera’s per-pill price of $132.

In December 2018, Biogen submitted an NDA for Vumerity, which the FDA subsequently approved for the treatment of MS. Although Vumerity and Tecfidera have different molecular structures and dosing regimens, both are metabolized by the body into the same active ingredient. Biogen relied on clinical studies conducted to test Tecfidera’s safety and efficacy when seeking approval for Vumerity. Sales of Vumerity began in October 2019. Unlike Tecfidera, Vumerity’s protective patents do not expire until October 2033, which means Vumerity has no generic equivalent.

Alleged scheme. The plaintiffs alleged that, despite the launch of generic dimethyl fumarate, patients were unable to access these lower-cost generics due to a two-part scheme by Biogen to impede competition. First, a rebate-for-tiering payments where Biogen funneled rebates and service fees to PBMs that agreed not to place generic dimethyl fumarate on more favorable formulary tiers, to label the generics as “specialty” drugs (triggering higher cost-sharing), and to keep the generics out of the lowest-cost tier altogether. These decisions allegedly hindered the implementation of automatic substitution laws and slowed the adoption of generics. Second, while generics languished, Biogen’s sales force pressed physicians to switch patients to Vumerity; by mid-2021, monthly Vumerity sales had jumped from 50,000 to 423,000 units.

The plaintiffs pleaded Sherman Act §§ 1—2, parallel state-law antitrust claims, and a Robinson-Patman § 2(c) commercial-bribery claim. The court agreed with Biogen’s characterization of the federal counts as unlawful exclusive dealing and an anticompetitive product hop, and that the plaintiffs had not plausibly shown substantial foreclosure or coercive conduct.

Antitrust claims. The complaint failed because the allegations failed to plead cognizable antitrust claims adequately, and the plaintiffs are legally barred from pursuing this antitrust action due to the lack of directness between themselves and the injuries allegedly suffered. The court applies a unified analysis to the plaintiffs’ Sherman Act § 1 and § 2 claims, as both stemmed from the same alleged conspiracy between Biogen and the three dominant PBMs, CVS Caremark, Express Scripts, and OptumRx. The plaintiffs’ rebate-for-tiering theory was an exclusive-dealing arrangement, while the Vumerity migration claim was a potential product hop. The court acknowledged that the conduct may fall into multiple antitrust categories, but the key inquiry was whether it plausibly harms competition, not just competitors.

Payments to PBMs. The exclusive dealing theory failed because the plaintiffs did not allege any facts showing that Biogen’s arrangements substantially foreclosed generic competition in the relevant market. The plaintiffs claimed that Biogen paid PBMs to ensure that generic dimethyl fumarate would not receive more favorable formulary placement than Tecfidera or Vumerity. These agreements allegedly impeded automatic substitution under state laws, resulting in continued purchases of higher-priced branded drugs. The court agreed that if tiering prevents patients from saving money by using generics, substitution laws may be undermined, but it found the complaint deficient in key respects.

First, the drug substitution laws were not adequately explained in the complaint. The plaintiffs clarified at oral argument that substitution often depends on lower out-of-pocket costs for patients—a point the court found crucial but missing from the pleadings. Second, the complaint did not explain why health plans could not choose untainted formularies. The PBMs offer multiple formularies, and most patients were not subject to the alleged tiering scheme. Since the plaintiffs themselves alleged that plans could choose which formularies to adopt, the court found no basis to infer substantial foreclosure. Third, there was insufficient market coverage. Even taking the plaintiffs' numbers as true, only about 31% of patients were subject to the disputed formularies. While courts do not impose rigid numerical thresholds, without allegations explaining why plans were coerced or lacked alternatives, this figure does not support a plausible claim of meaningful foreclosure.

Product hop. Without allegations of coercive conduct beyond mere marketing or parallel pricing, the product hop theory failed. The court noted that product redesigns are not inherently unlawful; however, they become anticompetitive when combined with coercion. Applying Second Circuit precedent, the court held that the plaintiffs failed to allege the coercive conduct necessary for a product hop claim. The plaintiffs do not claim that Biogen withdrew Tecfidera from the market and there are no allegations of false or misleading marketing, just that the comparative benefits of Vumerity were arguably overstated. Both Tecfidera and Vumerity were classified as “specialty drugs,” so patients did not face a pricing incentive to switch. Finally, no conduct was alleged that would have compelled a switch from Tecfidera to Vumerity, rather than simply slowing generic substitution.

The plaintiffs argued that Biogen coerced doctors and patients into switching to Vumerity through various means. First, they alleged that Biogen’s payments to PBMs made generic dimethyl fumarate cost at least as much to patients as brand Tecfidera, rendering the generics non-substitutable under drug substitution laws. The court did not see how this would coerce doctors and patients to switch to Vumerity. The plaintiffs alleged that physicians do not choose what therapies to prescribe based on cost. The court recognized how making generic dimethyl fumarate more expensive to patients would keep them on Tecfidera, but not how it would coerce doctors to switch patients to Vumerity. The plaintiffs did not allege any misleading or false statements to physicians.

Proper antitrust plaintiffs. The plaintiffs failed to allege that they used any formulary managed by a co-conspiring PBM or that their health plans were subject to the rebate-for-tiering scheme they challenge. Although counsel confirmed at oral argument that all named plaintiffs engaged the defendant PBMs and were affected by the alleged formulary restrictions, these key facts are missing from the complaint. The court found that only health plans using formularies tainted by the conspiracy can plausibly claim injury. Thus, to establish standing and antitrust injury, the plaintiffs must amend their complaint to include these basic facts.

Biogen raised two limitations on antitrust standing. First, the direct purchaser rule under Illinois Brick bars plaintiffs who are indirect purchasers because wholesalers and pharmacies sit between drugmakers and plans. The plaintiffs alleged elsewhere that “wholesalers and retailers passed on inflated prices,” which may contradict their core theory that PBM formulary manipulation directly caused the harm. The court suggested the plaintiffs clarify how PBM tiering impacted prices paid by plans without implicating traditional pass-through chains, especially if they hope to fit within a direct-purchaser exception.

Second, the plaintiffs’ request for injunctive relief was barred for lack of directness. Biogen also claims the plaintiffs are too remote from the alleged harm. Since the court had concluded that the plaintiffs are the most directly injured victims of the scheme, it rejected this argument.

The court further noted that nowhere did the plaintiffs allege that they used the services of any co-conspiring PBMs or that their members were subject to any formulary tainted by the alleged scheme. This itself was grounds for dismissal, as the court’s view is that only plans using a formulary authored by a co-conspiring PBM and containing the complained-of tiering problems would be injured by the alleged anticompetitive scheme. These allegations are necessary for the plaintiffs’ claims to proceed; therefore, the court expects them to appear in an amended complaint, should the plaintiffs choose to file one.

Robinson-Patman Act. The plaintiffs also brought a commercial bribery claim under Section 2(c) of the Robinson-Patman Act (RPA). The court held that, because the complaint lacked plausible allegations of a fiduciary duty, the plaintiffs failed to state a valid claim for commercial bribery under the Robinson-Patman Act. Accordingly, the § 2(c) count was dismissed without prejudice.

The court focused on one element for stating such a claim, specifically whether the plaintiffs have plausibly alleged a fiduciary relationship between them and the PBMs. Bringing a commercial bribery claim under Section 2(c) requires the plaintiffs to allege that PBMs breached a fiduciary duty owed to the plaintiffs.

To invoke § 2(c), the plaintiffs must show that Biogen’s payments to PBMs were made to intermediaries (PBMs) who were acting as agents or fiduciaries for the injured party (the health plans). Although the plaintiffs label PBMs as "agents," the complaint failed to allege the key control elements required under Illinois law to establish an agency relationship. The test of agency under Illinois law is whether the alleged principal has a right to control the manner and method in which the suspected agent carries out work and whether the alleged agent can affect the legal relationships of the principal. The plaintiffs acknowledged that PBMs exercise independent and “unregulated discretion” in formulary design, which undermines any claim that health plans controlled PBMs as principals.

A fiduciary duty can also arise from “special circumstances” involving a relationship of trust and influence. The plaintiffs argued PBMs promote themselves as knowledgeable allies in reducing drug costs, but the court found this to be insufficient. General claims about expertise and good intentions do not meet that standard. Instead, what is required is a solicitation of trust plus acceptance of a duty, supported by specific marketing statements or conduct, which were absent here. The court noted that if the plaintiffs choose to amend, they must supply detailed allegations demonstrating the basis of a fiduciary relationship and the concomitant duties owed to them by PBMs.

The Case is No. 1:24-cv-07387.

Judge: Perry, A.

Attorneys: Dean John Balaes (Sperling & Slater, LLC) for Local No. 1 Health Fund. Alexander E. Barnett (DiCello Levitt LLP) for UFCW Local 1500 Welfare Fund. Lee Albert (Glancy Prongay & Murray LLP) for Teamsters Local 237 Retirees' Benefit Fund. Eddie Hasdoo (Jones Day) for Biogen, Inc.

Companies: Local No. 1 Health Fund; UFCW Local 1500 Welfare Fund; Teamsters Local 237 Retirees' Benefit Fund; Biogen, Inc.

Cases: Antitrust IllinoisNews GCNNews