Federal Circuit Allows Teva Patents to Remain in Orange Book. The Federal Circuit recently
granted Teva Pharmaceutical’s motion for a stay of removal of its patents from the Orange Book in
its ongoing dispute with Amneal Pharmaceuticals, Inc. Listing patents in the Orange Book allows
branded drugmakers to bring patent infringement actions to stop sales of proposed generic
versions, which can then trigger a 30-month stay on FDA approval of generic versions. The Federal
Trade Commission (FTC) has warned about Orange Book listing abuses and pushed Teva and
other drugmakers to delist certain patents, including Teva inhaler patents. On June 10, 2024, Teva
sought a stay of a district court order requiring it to correct or delete certain Orange Book patent
information while it appeals an order finding that Teva infringed Amneal Pharmaceutical’s patents.
Teva argued that it would suffer irreparable harm if it were required to remove the patents, since it
would be unable to seek the 30-month stay under the Hatch-Waxman Act. Amneal responded that it
was “mere speculation” that Teva would be unable to seek the 30-month stay and thus could not
show how it would be irreparably harmed. On July 10, 2024, the Federal Circuit granted the stay in a
two-page order, concluding that “[b]ased on the papers submitted, and our expedition of the
completion of briefing and argument on the merits, we conclude that a stay is warranted under the
circumstances of this case at this time.” The stay will remain in place “until further notice of this
court.” The case is Teva Branded Pharmaceutical Products R&D, Inc. v. Amneal Pharmaceuticals of
New York, LLC, Case No. 24-1936 (Fed. Cir. 2024)
FTC Issues Interim Report on PBMs. On July 9, 2024, the FTC issued an interim report on a study
that it launched in 2022 regarding pharmacy benefit managers (PBMs) and their role as facilitators
between drugmakers and insurers. The report says that enforcers found that industry consolidation
has led to six PBMs purportedly “control[ling]” 95% of all prescriptions in the United States. The
report goes on to say that these PBMs “wield enormous power and influence over patients’ access
to drugs and the prices they pay.” The report also claims that PBMs are responsible for overcharges
on two cancer drugs—Gleevec and Zytiga—and Chair Khan’s statement accompanying the report
claimed that “[t]his overcharging represents billions of dollars in drug spending and reveals the
incentives PBMs can have to preference their own affiliated pharmacies regardless of what is best
for patients.” Commissioner Holyoak voted against issuing the interim report, saying in a statement
that “[t]he report does not provide any empirical evidence as to the state of competition in the prescription drug market but rather simply describes the high-level nature of the healthcare system
in the U.S.,” and that “[t]he report’s failure to offer empirical evidence to support claims about the
market power of PBMs is particularly troubling.” The FTC has indicated it will continue to investigate
the PBM industry and publish a final report.
State of Vermont Sues PBMs. On July 17, 2024, the State of Vermont sued two PBMs and their
subsidiaries for violating Vermont’s Consumer Protection Act. Vermont alleges that the two PBMs
have, as a result of “massive consolidation,” acquired “near complete control of the pricing,
dispensing, and reimbursement systems for all prescription drugs for their” clients. Vermont claims
that defendants have “engaged in deceptive acts” in commerce, including by misrepresenting: (1)
that their construction of formularies lowers the cost of prescription drugs; (2) that the payments they
receive from manufacturers lower the cost of prescription drugs; and (3) misrepresenting that the
formulating decisions are evidence- or value-based decisions. Vermont also claims that the
defendants engage in unfair acts and practices, including because, (1) they use their market
position to drive up prices, while excluding access to lower priced drugs; and (2) patients have no
choice other than to pay inflated prices because the defendants have “near complete control over
the pharmaceutical pricing chain.” The case is State of Vermont v. Evernorth Health, Inc., et al.,
Case No. 24-cv-02759 (Vt. Sup. Ct.).
Class Certification Denied in EpiPen Direct Purchaser Litigation. On July 1, 2024, a court in the
District of Minnesota denied class certification in the In re EpiPen Direct Purchaser Litigation.
Plaintiffs Rochester Drug Co-Operative, Inc. and Dakota Drug, Inc.—two drug wholesalers—allege
that Mylan engaged in conduct that violates both the Racketeer Influenced and Corrupt
Organizations Act and Section 2 of the Sherman Act. They sought to certify a class of drug
wholesalers that bought EpiPens directly from Mylan. The court denied the motion for class
certification. First, the court found that plaintiffs failed to meet Rule 23(a)(1)’s numerosity
requirement because, after factoring in the statute of limitations, the class would only have 46
members. The court observed that the “paradigmatic class action involves many members with
small claims… [t]his case isn’t like that.” The court also found that plaintiffs failed to meet Rule
23(a)(4)’s adequacy requirement. Unlike the two named plaintiffs, the court found that some drug
wholesalers actually benefitted from Mylan’s pricing structure and plaintiffs therefore could not
adequately represent all class members. Finally, the court found that plaintiffs failed to meet Rule
23(b)(3)’s predominance requirement. The court determined that plaintiffs failed to adequately
demonstrate that the alleged bribery and kickback scheme that Mylan allegedly engaged in with
PBMs was the cause of their harm and had not shown that causation could be proven through
common proof. The case is In re EpiPen Direct Purchaser Litigation, Case No. 20-cv-827 (D. Minn.).
Summary Judgment Denied in Contact Lens Antitrust Litigation. On July 9, 2024, a court in the
Middle District of Florida denied defendant Alcon’s motion for summary judgment on plaintiff
Lens.com’s Sherman Act and Clayton Act claims. Lens.com, a gray market reseller of contact
lenses, pursued two theories of anticompetitive conduct alleging : (i) a hub-and-spoke conspiracy
between Alcon, a manufacturer of soft contact lenses, and other contact lens manufacturers,
distributors, and providers and (ii) a vertical conspiracy between Alcon, its distributors, and
providers. For instance, Lens.com alleged that Alcon maintained a unilateral pricing policy (UPP) agreement between it, its distributors, and providers, that providers monitored UPP violations by
other providers, and distributors enforced the UPP using do-not-sell lists. Lens.com alleged that
Alcon put it on a do-not-sell list due to perceived UPP violations. The court found that there are
triable issues of fact regarding the existence of both a horizontal/hub-and-spoke conspiracy and a
vertical conspiracy. The court also found that Lens.com alleged facts sufficient to support two
relevant product markets: (1) a market for all contact lenses, because contact lenses and other
forms of vision correction are not interchangeable; and (2) due to the unique situation of the alleged
contact lenses market, where patients are prescribed specific brands and models of contact lenses
and are unable to switch to other brands, the market for Alcon-branded contact lenses. The case is
In re Disposable Contact Lens Antitrust Litigation. Case No. 19-cv-706 (M.D. Fla.).