• Pharmacies file Sherman Act antitrust suit against Wyeth, Teva

    Bloomberg reports that Walgreens, Krogers, Safeway and other stores are suing Wyeth and Teva for conspiring to keep a generic version of the Effexor XR antidepressant off the shelf by buying junk patents, adding them to the Orange Book and suing to block generic entry with full knowledge the patents were not being infringed.  Teva is in the suit as it was the first to file for generic status and agreed to a “pay for delay” deal (FTC background paper here; Scott Hemphill’s academic paper here).

    Drug companies call these activities “product lifecycle management.” This case alleges it is a violation of the Sherman Antitrust Act. I pulled the complaint from PACER, which alleges Wyeth made $2.5 billion from these sham patents:

    “11. As a result of Defendants’ exclusionary conduct, generic versions of Effexor XR were illegally blocked from the marketplace from June 2008 through at least June 2010.  During this period of foreclosure, U.S. annual sales of Effexor XR topped $2.5 billion.  Direct purchasers paid significantly more for extended release venlafaxine hydrochloride capsules during this two year window (and continue to pay more for Effexor XR and its generic equivalents) than they would have paid in the absence of Defendants’ illegal and anticompetitive acts.”

    The complaint alleges that Wyeth defrauded the US Patent and Trademark Office in order to abuse the FDA Hatch-Waxman process:

    “46. Wyeth submitted six sequential applications that led to three method of use patents, the ‘171, ‘958, and ‘120 patents.  All three patents are, and have always been, unenforceable; they only issued because Wyeth defrauded the PTO.  These patents prevented generics from coming to market in June of 2008.”

    In addition to the drug stores, the suit is also brought “as the assignee” of the big 3 drug wholesalers – Cardinal Health; AmerisourceBergen; and McKesson. What will they say about Merck Pfizer’s lifecycle extension plans for Lipitor?

    KO

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