Apparently, a $107 million deal value isn't large enough to be considered anticompetitive when viewed in the context of delaying generics to a blockbuster brand.
A Delaware federal judge reached that conclusion when he threw out an antitrust claim targeting a pay-for-delay deal between AstraZeneca and generic maker Accord Healthcare over the British pharma’s popular antipsychotic Seroquel XR.
But that was only a half-win for AstraZeneca in a class action suit. The judge has allowed another similar claim brought by drug wholesalers, retailers and payers against a separate deal that AZ originally signed with Handa Pharma and later passed on to Endo’s Par Pharmaceutical.
Both claims allege that the “reverse payment” agreements AZ inked with those generic makers to settle Seroquel XR patent disputes delayed and suppressed competition, causing higher prices.
In two separate deals entered in 2011, AZ effectively barred the generic companies from launching their Seroquel XR copycats at different dosing forms until November 2016. AZ also promised not to sell its authorized generics for a certain period.
The Accord deal centered on 400-mg Seroquel XR and was valued at about $107 million, payers and wholesalers argued. But the plaintiffs offered no allegations to support “whether $107 million is sufficiently ‘large’ or ‘justified’ under [current law] to sustain a reverse payment antitrust claim,” U.S. District Judge Colm Connolly wrote in his opinion (PDF) this week.
Although people may view $107 million as a large amount, it’s not the case for large pharma firms during patent litigations, Connolly said, especially when compared with the extended-release drug’s $1 billion-plus annual U.S. sales.
What’s more, before the settlement agreement, Accord actually conceded in a patent lawsuit that it infringed an AZ patent. That means Accord wouldn’t have been able to immediately launch its generic anyway. Further, the plaintiffs didn’t offer any facts that “plausibly imply” that the patent had weaknesses that would have enabled Accord a win in that lawsuit, the judge noted.
On the flip side, the pay-for-delay allegations centered on the other deal involving Handa and Par may have merit, the judge concluded. That deal was valued at $233 million, wholesales and payers estimate.
In defense against those claims, AZ argued that the first antitrust suit, brought in 2019, already passed the maximum time allowed for a legal proceeding. AZ suggested the calculation for the four-year limit should start in 2011 when the pay-for-delay deal was executed, but the judge said the clock was reset each time AZ sold a Seroquel XR doses at alleged anticompetitive prices.
AZ also pointed to a 2014 FDA complete response letter and multiple subsequent amendments to an application before a final approval in May 2017 as evidence that the Handa/Par generic wouldn’t have been able to launch, pay-for-delay agreement or not. However, the judge said that was pure speculation.
The Seroquel franchise has attracted several rounds of legal scrutiny. Back in 2010, AZ paid the U.S. government $520 million to resolve allegations that it promoted off-label use of the antipsychotic drug. In 2018, the company paid $110 million to settle a Texas Medicaid fraud case, where it allegedly promoted Seroquel to child and adolescent psychiatrists.