Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Providence alleges biotech company monopolized Thalomid, Revlimid markets, (Mar 6, 2015)

By Greg Hammond, J.D.

The City of Providence, Rhode Island has filed an antitrust suit against biotech company, Celgene Corp., for allegedly unlawfully perpetuating its monopoly over the markets for the prescription drugs Thalomid and Revlimid. Celgene allegedly used Risk Evaluation and Mitigation Strategies, patents, and sham litigation to hinder potential competitors from creating generic versions of the drugs (City of Providence v. Celgene Corp., Case No. 2:15-cv-01605-KM-SCM).

Thalidomide is a highly effective sleeping pill, originally used to treat nausea or morning sickness in pregnant women. However, the drug was banned worldwide after researchers found that the drug caused severe birth defects. The FDA conditionally approved Celgene’s application for the drug in 1998 as a treatment for a form of leprosy. In addition, both Thalidomide, combined with a steroid, and Revlimid, have been conditionally approved for the treatment of multiple myeloma. The FDA required that Celgene implement Risk Evaluation and Mitigation Strategies in 2010.

In its class action complaint filed in the federal district court in Newark, Providence alleges that Celgene’s revenues from Thalomid and Revlimid have increased dramatically in the last six years, as a direct result of Celgene’s unlawful assertion of its monopoly over the markets for these drugs. Between 2009 and 2013, the company generated roughly $17.1 billion in revenue from the sales of Thalomid and Revlimid. Celgene purportedly charges between $212 and $357 per capsule for Thalomid and approximately $500 per capsule for Revlimid.

Providence alleges that there are no generic versions of Thalomid or Revlimid on the market, due to Celgene’s unlawful interference with generic manufacturers’ attempts to develop generic equivalents. Specifically, Providence alleges that Celgene unlawfully maintained its monopoly over the Thalomid and Revlimid markets by: (1) using the Risk Evaluation and Mitigation Strategies that were designed to ensure safe access to the drugs as a pretext to delay and indefinitely postpone the availability of significantly less expensive generic alternatives to these drugs; (2) fraudulently obtained use patents on procedures that ensure safe use of Thalomid and Revlimid in order to block generic entrants; (3) engaged in sham litigation against any potential competitor who was able to obtain samples of Thalomid and Revlimid for use in generic bioequivalence testing; and (4) abused the Citizen Petition process.

Celgene faces a five count class action complaint, alleging: (1) monopolization and monopolistic scheme under the state laws of Arizona, California, Washington, D.C., Florida, Illinois, Iowa, Kansas, Maine, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oregon, Puerto Rico, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wisconsin; (2) attempted monopolization under state law; (3) unfair and deceptive trade practices under state law; (4) injunctive relief under Section 16 of the Clayton Act for Celgene’s alleged violations of Section 2 of the Sherman Act; and (5) unjust enrichment under state law.

Attorneys: Jennifer Sarnelli (Gardy & Notis, LLP) and Jeffrey C. Block (Block & Leviton LLP) for City of Providence.

Companies: City of Providence; Celgene Corp.

News: Antitrust NewJerseyNews