Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Biopharmaceutical company allegedly created monopoly by acquiring sole competing drug, (Jan 13, 2014)

By Linda O’Brien, J.D., LL.M.

A biopharmaceutical company has engaged in anticompetitive conduct and created a monopoly by illegally acquiring the rights to a competing drug to preserve its market dominance for its brand name drug, according to a complaint filed in the federal district court of Santa Ana, California (Retrophin, Inc. v. Questcor Pharmaceuticals, Inc., No. 8:14-cv-00026-JLS-JPR, filed January 7, 2014).

Plaintiff Retrophin, Inc. is a biopharmaceutical company focused on the development, acquisition, and commercialization of drugs for the treatment of serious, catastrophic, or rare diseases for which there are no current viable treatment options. Defendant Questcor Phamaceuticals, Inc. acquired the rights to, and is the sole U.S. provider of, approved therapeutic preparations of adrenocorticotropic hormone (ACTH). The drug is sold under the brand name, H.P. Acthar Gel (Acthar), and is not patented.

The complaint alleges that a monopoly exists because Acthar is the only long-acting ACTH drug approved by the Food and Drug Administration (FDA) for use in the United States, and Acthar is the most effective and dominant treatment for Infantile Spasms and Nephrotic Syndrome. Additionally, Questcor obtained an “orphan drug designation” for Acthar from the FDA giving it the exclusive right to market Achar.

In June 2013, Retrophin had negotiated an agreement with a foreign pharmaceutical company to purchase Synacthen, an ACTH drug sold outside the United States for treatment of Infantile Spasms, Nephrotic Syndrome, and other diseases. Retrophin planned to obtain FDA approval to sell Synacthen in the United States and compete directly with Questcor by undercutting Questcor’s price for Acthar. On the date Retrophin was to sign the agreement with the foreign pharmaceutical company, Questcor secretly negotiated and acquired the rights to Synacthen to preserve its monopoly, according to the complaint.

Questcor did not make a premerger notification filing with the Department of Justice and FTC. Questcor’s agreement provides that, if Questcor is forced to divest its rights to Synacthen on antitrust grounds, the foreign pharmaceutical company can keep the entire purchase price, the complaint states.

The complaint alleges that there is not meaningful substitute for Acthar or ACTH in the United States for the treatment of disorders such as Infantile Spasms and Nephrotic Syndrome, and no other manufacturer can sell ACTH drugs in the United States without obtaining FDA approval. Questcor’s monopoly power is also evidenced by the significant price increase of Achtar since its acquisition by Questcor, according to the complaint.

Retrophin asserts claims under California’s Unfair Competition Law (UCL), Section 7 of the Clayton Act, and Sections 1 and 2 of the Sherman Act. The action seeks declaratory and injunctive relief, disgorgement of profits, treble damages, costs of suit, attorney fees, and any other just and proper relief.

Attorneys: Kristin L. Holland and James J. Calder (Katten Muchin Rosenman LLP) for Retrophin, Inc.

Companies: Retrophin, Inc.; Questcor Pharmaceuticals, Inc.

News: Antitrust CaliforniaNews