Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Pfizer allegedly used sham patent litigation to delay generic Celebrex launch, (Jan 22, 2015)

By Linda O’Brien, J.D., LL.M.

Brand name drug manufacturer Pfizer, Inc. suppressed competition and restrained trade for its brand drug, Celebrex, by procuring a reissue patent by fraud and using sham patent infringement litigation to delay the launch of generic versions of Celebrex in the market, according to a complaint filed in the federal district court of Norfolk (Allied Service Division Welfare Fund v. Pfizer, Inc., January 20, 2015).

Pharmaceutical company Pfizer, and its subsidiaries, G.D. Searle and Pfizer Asia Pacific, manufacture the prescription drug, celecoxib, under the brand name Celebrex. Celebrex is a non-steroid anti-inflammatory drug approved to treat osteoarthritis, rheumatoid arthritis, and similar conditions. Celebrex is one of the most widely prescribed drugs in the world.

Allied Services Division Welfare Fund is a health and welfare benefit fund which provides health and pension benefits to fund participants and their dependents.

The Federal Drug Administration (FDA) approved the marketing of Celebrex in 1998. Shortly after approval, Pfizer obtained and listed in the FDA Orange Book three patents encompassing a number of compounds and the formulation of celecoxib. Pfizer obtained a third patent, U.S. Patent No. 5,760,068 (the ‘068 patent), covering methods using the already patented formulation and compounds of celecoxib.

The complaint alleges that in 2003, generic drug manufacturer, Teva Pharmaceuticals, sought approval to market a generic version of Celebrex and asserted that the ‘068 patent was invalid. Pfizer filed suit for patent infringement and the ‘068 patent was later ruled invalid by the court. To avoid the consequences of the determination, which would subject Celebrex to generic competition after May 2014, Pfizer sought to reissue the method-of-use ‘068 patent. Pfizer submitted false information to the U.S. Patent and Trademark Office (USPTO) , claiming it had made an error in filing during the prosecution of the ‘068 patent. The misrepresentations were allegedly made with the specific intent of misleading the USPTO, which ultimately allowed the reissue patent in 2013.

In addition to Teva, four additional generic drug manufacturers sought and obtained tentative approval from the FDA to market generic celecoxib. Pfizer filed suit against the five generic drug manufacturers, alleging that each of their products would infringe on the reissue patent. Allied Services alleges that the litigation was a sham since the reissue patent was manifestly invalid, and no reasonable litigant would therefore expect Pfizer to succeed on the merits of any infringement claims. Although the reissue patent was ruled invalid in March 2014, Teva and two other generic drug manufacturers entered into settlements with Pfizer that will allow the launch of generic versions of Celebrex in December 2014, the complaint charges.

Pfizer had monopoly power in the market for celecoxib capsules and maintains the price for Celebrex at supracompetitive levels without losing substantial sales to other products. Pfizer enjoyed high barriers to entry in the relevant market due to legally and illegally created patent protections, and high costs of entry and expansion. But for the anticompetitive conduct, multiple generic drug manufacturers would have entered the market as early as May 2014 when Pfizer’s first two patents expired. Instead, Pfizer maintained its monopoly power through a scheme to exclude competition and caused purchasers to pay more for celecoxib capsules than they otherwise would have absent the illegal conduct, the complaint states.

Allied asserts claims for unjust enrichment, monopolization under state laws, and violations of Sections 1 and 2 of the Sherman Act. The action seeks declaratory and injunctive relief, treble damages, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 2:15-cv-00029-RBS-DEM.

Attorneys: Brielle M. Hunt (Miller Legal LLC), James R. Dugan, II (The Dugan Law Firm, APLC), and Art Sadin (Sadin Law Firm, P.C.) for Allied Services Division Welfare Fund.

Companies: Allied Services Division Welfare Fund; Pfizer, Inc.; Pfizer Asia Pacific PTE. Ltd.; G.D. Searle LLC.

News: Antitrust VirginiaNews