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Pharma firm likely to duck antitrust suits over HIV drugs

The lawsuits claim Teva Pharmaceuticals and other drugmakers made retailers, insurers and patients pay hundreds of millions of dollars in inflated prices for necessary HIV treatments.

SAN FRANCISCO (CN) — CVS and Walgreens likely waited too long to sue a pharmaceutical giant on claims it conspired to delay cheaper generic versions of life-saving HIV medications, a federal judge signaled in court Wednesday.

The nation’s two largest pharmacy retailers sued Gilead Sciences, Bristol-Myers Squibb and Teva Pharmaceuticals this past September. They claim the drugmakers entered into a series of unfair patent settlements that delayed generic versions of HIV drugs, driving up prices for consumers.

The complaints are part of a flurry of federal antitrust suits filed against the makers of HIV antiretroviral drugs in 2021 by retailers and major insurers, including Humana and Blue Cross Blue Shield.

Teva Pharmaceuticals moved to dismiss the retail giants’ claims, arguing they are based on conduct that occurred more than four years before their lawsuits were filed on Sept. 22, 2021, rendering them expired under a four-year statute of limitations.

In a virtual courtroom Wednesday, Walgreens attorney Scott Perwin insisted that a 1974 Supreme Court decision created an exception to that rule. The high court’s 1974 ruling in American Pipe & Constr. Co. v. Utah established a doctrine that stops the clock on claims against a defendant once they are named as a co-conspirator in an antitrust class action, Perwin said.

Because Teva was named as a co-conspirator in an antitrust class action filed by lead plaintiff FWK Holdings in Sept. 29, 2020, the retailers say the statute of limitations stopped running on that date.

U.S. District Judge Edward Chen greeted that argument with skepticism, noting American Pipe stated the exception applies when an entity is named as a defendant in an antitrust class action, not merely a co-conspirator.

American Pipe doesn’t really provide a basis to toll against an unnamed defendant, co-conspirator or not,” Chen said.

Perwin urged Judge Chen to embrace the reasoning adopted by his Northern California colleague U.S. District Judge Susan Illston when she wrote in an August 2012 ruling in an antitrust suit over LCD flat screens that claims were tolled for entities that “were named as defendants or co-conspirators” in previous antitrust class actions.

Teva attorney Christopher Holding replied that Illston’s assertion in that decision appears to come out of thin air with no known legal authority or precedent behind it.

“The vast majority of cases hold otherwise,” Holding said. “Other than saying it, Judge Illston hasn’t provided any basis for saying why that is correct.”

In their opposition to Teva’s motion to dismiss, Walgreens and CVS argued the purpose of American Pipeline was to stop the statute-of-limitations clock once a defendant has been notified of the claims against it. Being named as a co-conspirator in an antitrust class action is enough to put a company like Teva on notice about such claims, the retailers contend.

Chen did not appear swayed by that reasoning. He remarked that no court aside from Judge Illston appears to have adopted that interpretation.

“It definitely seems a very substantial extension of American Pipeline, the rationale of which doesn’t jump out at me,” Chen said.

Chen said he would take another look at the case law before issuing his ruling.

About 1.2 million people living in the United States have human immunodeficiency virus, or HIV, an incurable virus that attacks the body’s immune system and can lead to AIDS if untreated. Antiretroviral drugs can reduce an HIV patient’s viral load to undetectable levels, allowing them to live longer and effectively eliminating the risk of transmitting HIV to partners through sex.

Gilead makes three of the four top-selling HIV medications in addition to other drugs used in HIV combination antiretroviral therapy, or "cART." More than 80% of U.S. patients starting HIV treatment take one or more of Gilead's products each day, according to the retailers’ lawsuits.

The plaintiffs claim Teva struck deals to settle patent suits with Gilead that delayed the introduction of a generic form of Viread until December 2017 and generic forms of Truvada and Atripla until September 2020. They say those deals enabled the drugmakers to charge hundreds of millions of dollars in higher prices for necessary medications that would have otherwise been cheaper in a truly competitive market.

A separate suit filed against Gilead by Humana last year claims that most of the company’s HIV medications cost $10 to produce, but for nearly 20 years Gilead charged health plans thousands of dollars for a 30-day supply. HIV drugs earned Gilead nearly $17 billion in sales in 2020.

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