Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Generic drug manufacturer sues brand pharmaceutical maker Celgene for denying access for brand drug bioequivalence testing, (Apr 7, 2014)

By Linda O’Brien, J.D., LL.M.

A brand name drug manufacturer suppressed competition and restrained trade for its brand drugs, Thalomid and Revlimid, by using risk management programs established for Federal Drug Administration approval to deny access to its brand drugs for bioequivalence testing by a generic drug manufacturer attempting to develop generic versions of the drugs, according to a complaint filed in the federal district court of Newark (Mylan Pharmaceuticals, Inc. v. Celgene Corporation, April 3, 2014).

Pharmaceutical company Celgene Corporation manufactures the brand drugs, Thalomid and Revlimid. Thalomid is used in the treatment of complications from Hansen’s Disease, commonly known as leprosy, and Revlimid is used for treating the blood cell disorder, myelodysplastic syndromes (MDS). Due to rigorous restrictions imposed on the distribution of Thalomid and Revlimid, the Federal Drug Administration (FDA) conditioned Celgene’s approval for these drugs on its establishment of a risk management program, to ensure appropriate safeguards on the drugs’ use and distribution.

The complaint alleges that generic drug manufacturer, Mylan Pharmaceuticals, sought approval to develop generic versions of Thalomid and Revlimid by filing an Abbreviated New Drug Application (ANDA) with the FDA. Through the ANDA filing, the generic drug manufacturer must demonstrate bioequivalence to the branded drugs. Generally, a generic drug manufacturer can obtain samples of the branded drugs for bioequivalence testing through normal distribution channels; however, Mylan could not obtain samples through those channels due to the respective risk management programs implemented by Celgene. Celgene has used its risk management programs as a pretext to prevent Mylan from acquiring the necessary samples to conduct bioequivalence studies, even after the FDA determined that Mylan’s safety protocols were acceptable to conduct those studies.

According to the complaint, in furtherance of its scheme to restrain and monopolize the market, Celgene implemented certain distribution restrictions that significantly limit the availability of the branded drugs. Mylan contacted wholesale distributors throughout the years to obtain Thalomid and Revlimid samples to conduct bioequivalence studies but those efforts were unsuccessful. Celgene allegedly has agreements that require its wholesale distributors to withhold the Thalomid and Revlimid samples and has refused to sell these samples to Mylan directly.

Generic drug competition allows consumers to buy a generic equivalent of a brand drug at a reduced price and can provide large savings. Generic versions of Thalomid and Revlimid would be priced substantially lower than the brand versions and would be benefit consumers, patients, and other drug purchasers with reduced costs for their medications.

The complaint alleges that the effect of Celgene’s conduct is that no generic drug manufacturer has been able to bring a generic equivalent to Thalomid and Revlimid to market. Having set up a barrier to competition for its branded drugs, Celgene is able to reap supracompetitive profits. Such conduct harms consumers by denying them the substantial benefits of lower-priced generic competition and forces them to pay inflated prices for these drugs.

There are substantial barriers to entry into the Thalomid and Revlimid markets, including the FDA regulatory requirements and the substantial time and expense required to develop generic equivalents. Moreover, through its exclusionary conduct, Celgene has created additional artificial barriers to entry in the market by preventing Mylan from obtaining samples of the brand drugs for bioequivalence testing.

Mylan asserts claims for unfair competition, tortious interference with an economic advantage, and violations of Sections 1 and 2 of the Sherman Act and the New Jersey Antitrust Act. The action seeks declaratory and injunctive relief, treble damages, costs of suit, attorneys’ fees, and any other just and proper relief.

The case is No. 2:14-cv-02094-ES-MAH.

Attorneys: Arnold B. Calman (Saiber LLC) and Michael S. Sommer and Seth C. Silber (Wilson Sonsini Goodrich & Rosati) for Mylan Pharmaceuticals, Inc.

Companies: Mylan Pharmaceuticals, Inc.; Celgene Corporation

News: Antitrust NewJerseyNews