Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Pfizer accused of Celebrex double-patenting, sham litigation, (Aug 28, 2014)

By Greg Hammond, J.D.

A class action suit has been filed against pharmaceutical company Pfizer, Inc., G.D. Searle LLC, and Pfizer Asia Pacific Pte. Ltd. (collectively, Pfizer), for engaging in an anticompetitive scheme designed to block and delay entry of generic versions of the prescription drug Celebrex® into the market and to maintain the company’s monopoly power. The suit was filed yesterday in the federal district court in Norfolk, Virginia (Stanley v. Pfizer, Inc., August 27, 2014).

Celebrex is a non-steroidal anti-inflammatory drug approved to treat acute pain, ankylosing spondylitis, juvenile rheumatoid arthritis, osteoarthritis, rheumatoid arthritis, and primary dysmenorrhea. It is one of the most widely prescribed drugs in the world, topping $2 billion in sales last year. The active ingredient in Celebrex—celecoxib—reduces inflammation and is the subject of two valid patents, an invalid patent, and a supposed fraudulently-obtained reissue patent.

Barbara Stanley, a consumer of Celebrex, purchased the prescription drug in Florida. She filed a class action suit against Pfizer, alleging that she and others paid more than they would have absent the pharmaceutical company’s unlawful scheme to prevent and delay generic entry into the market, and that they were consequently injured as a result of the illegal and wrongful conduct.

According to the complaint, the U.S. Court of Appeals for the Federal Circuit found that a third Pfizer patent for Celebrex was invalid, as it was not patentably distinct from two existing patents. Nevertheless, Pfizer sought the reissuance of the defunct method-of-use patent from the U.S. Patent and Trade Office (PTO), claiming that its earlier applications for the patent contained unintentional “errors” needing correction in light of the Federal Circuit’s ruling. Stanley alleged that Pfizer “bombarded the PTO with false information, deflective arguments and voluminous irrelevant materials,” and the company’s “trickery” succeeded when the PTO allowed the reissue patent.

Stanley also alleged that the fraudulently obtained reissue patent was used to prosecute sham litigation against “would-be makers of generic Celebrex.” Specifically, she alleges that Pfizer knew that it obtained the reissue patent by fraud; Pfizer knew that a court would find the reissue patent erroneously granted and invalid for double-patenting over Pfizer’s earlier celecoxib patent; and Pfizer was not trying to win the sham litigation, but was merely trying to delay generic makers’ entry efforts into the market, and to use settlements to buy Pfizer additional exclusivity beyond May 2014. The company succeeded, the complaint asserts, as would-be generic manufacturer Teva Pharmaceuticals USA, Inc. settled with Pfizer, and agreed to not launch its competing generic product until December 2014, six months after the valid celecoxib patents expired.

Accordingly, Stanley asserted the following claims: (1) monopolization under 24 states’ laws, alleging that Pfizer willfully and unlawfully maintained its monopoly power in the celecoxib capsule market through double-patenting and sham litigation; (2) unjust enrichment; and (3) declaratory and injunctive relief. Stanley asserts that the class’ injuries consist of being denied the opportunity to purchase lower-priced generic Celebrex products and paying higher prices for Celebrex products than they would have paid in the absence of Pfizer’s anticompetitive conduct. She is seeking damages and multiple damages for the class’ injuries by Pfizer’s antitrust violations.

Attorneys: Wyatt B. Durrette, Jr., Barrett E. Pope, Brittany B. Falabella (DurretteCrump PLC), Jayne A. Goldstein (Pomerantz LLP), Robert D. Klausner, and Stuart A. Kaufman (Klausner Kaufman Jensen & Levinson) for Barbara Stanley.

Companies: Pfizer, Inc.; G.D. Searle LLC; Pfizer Asia Pacific Pte. Ltd.; Teva Pharmaceuticals USA, Inc.

News: Antitrust VirginiaNews