Generic delay class action suit filed over stroke drug

December 9, 2013 by

bouton croixMiami-Luken Inc., a wholesaler to pharmacies, accused Boehringer Ingelheim Pharmaceuticals Inc. of orchestrating a $120 million pay-for-delay deal to keep generic versions of its stroke prevention medication off the market, according to a putative class action filed in Pennsylvania federal court Friday.

Miami-Luken says it has been buying Boehringer’s Aggrenox at artificially inflated prices because Boehringer paid off a potential competitor in 2008, agreeing to give it a share of Aggrenox’s profits in exchange for delaying sale of the generic for seven years.

Miami-Luken alleges that co-defendant Barr Pharmaceuticals Inc., later bought by Teva Pharmaceutical Industries Ltd., received U.S. Food and Drug Administration approval for the drug in 2009, but has held off because of the settlement.

“But for the parties’ ongoing performance under the reverse payment agreements, generic competition for Aggrenox would have occurred earlier and prices for both branded and generic versions of Aggrenox would have been lower,” the complaint said. “As of today, there is still no generic equivalent of Aggrenox on the market in the United States.”

The complaint echoes allegations in a 2009 Federal Trade Commission suit that the agreement with Barr to promote some of Boehringer’s drugs was actually compensation to delay Barr’s competitive entry of a generic version of Aggrenox. The FTC said evidence indicated that the settlement was entered in exchange for Barr’s receipt of a share of Boehringer’s monopoly profits from the sale of the drug.

Friday’s suit claims that the settlement and co-promotion deal were linked, and that the deal for Barr was contingent on agreeing to Boehringer’s settlement offer.

“It was a pretext for a series of ongoing payments to Barr for entering into, and perpetuating, an unlawful market allocation agreement pursuant to which Barr agreed not to compete with Boehringer in exchange for a continuing share of Boehringer’s monopoly profits from the sale of Aggrenox,” the complaint says.

The co-promotion deal gave Barr about $120 million over seven years, based on Aggrenox’s sales, for a Barr subsidiary to promote the drug to obstetricians and gynecologists, according to Miami-Luken. But the deal wasn’t worth nearly that much, the complaint claims, because promoting a stroke prevention drug to obstetricians and gynecologists had “little or no reasonable expectation of benefit,” and the payments were based on global sales figures, not any increase the promotion may have caused.

The FTC asked the D.C. Circuit in September to force Boehringer to turn over documents about the co-promotion deal that it said were crucial to showing an antritrust violation. It was appealing a D.C. federal court’s 2012 ruling that Boehringer’s financial analyses of the agreements with Barr were protected under the opinion work product doctrine. The FTC’s suit argued that Boehringer used a number of tactics to delay the investigation into its agreements with Barr, such as inappropriately redacting documents and failing to conduct a careful and thorough search.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

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