After a yearslong court battle, Novartis has prevailed against a pair of class-action lawsuits alleging the company illegally protected its blockbuster leukemia drug Gleevec with "sham" patent litigation.
The United States Court of Appeals for the First Circuit on Tuesday found that the plaintiffs arguments that Novartis had gamed the patent system did not hold up.
The legal battle began when health plans and a direct purchaser alleged in lawsuits that Novartis obtained an improper follow-on patent for Gleevec by defrauding the U.S. Patent and Trademark Office. They further argued the drugmaker enforced its improper patent through baseless lawsuits against generic companies seeking to enter the market.
The lawsuits came after Novartis and generics maker Sun Pharma settled on a entry date for a copycat drug. The plaintiffs in their filings say Novartis "engaged in an exclusionary, anticompetitive scheme designed to create and maintain a monopoly for Gleevec and its generic substitutes" in the U.S.
The plaintiffs said Novartis should “rightly enjoy exclusivity” for its drug, but “patent gamesmanship and frivolous litigation undertaken solely for the purpose of extracting settlements that delay generic entry violate basic principles of antitrust law, and should be enjoined." At the time of the suit, Gleevec had pulled in $13.5 billion in the U.S., according to the plaintiffs.
Novartis in its response asked the District Court to toss the case because plaintiffs “lack standing to challenge presumptively valid patents in the first instance, which is a necessary predicate to their antitrust claims.” Further, Novartis said the plaintiffs "failed to plausibly allege that defendants engaged in sham litigation."
In the end, Novartis’ arguments won out at both the District Court and in appeals as judges at both levels found that the plaintiffs didn’t make arguments to support their cases. Gleevec was once Novartis' top medication, with its global sales reaching $4.75 billion in 2014. Sales for the drug have been on the slide more recently due to generics, coming in at $1.7 billion globally last year.