It took Novartis' Sandoz years to reach the market with a generic to United Therapeutics’ pulmonary arterial hypertension drug Remodulin, but last month, the company managed to do just that. Now, there’s a big problem hindering the generic launch, Sandoz alleges in a new lawsuit (PDF): United Therapeutics is blocking generic uptake by teaming with a devicemaker for exclusive access to pumps that administer the drug.
Sandoz and its generic marketing partner RareGen on Tuesday sued United Therapeutics and device company Smiths Medical for placing “artificial restrictions” that block access to Remodulin generics and maintain high prices. To do so, they allege, United and Smiths have instructed pharmacies dispensing treprostinil, the generic name for Remodulin, that Smiths' pumps can only be used with the branded version, and the device company has also threatened to stop selling its cartridges if pharmacies administer the generic version of the drug.
"This lawsuit stems from Sandoz’s and RareGen’s failure to take similar steps to ensure availability of a system to deliver their product, despite having eight years from filing the Abbreviated New Drug Application to do so," United's spokesman said.
In its lawsuit, Sandoz says it filed for FDA approval of a Remodulin generic way back in 2011. In 2015, the company inked a settlement with United allowing for a launch in June 2018. Over the years, United Therapeutics has partnered with other devicemakers Medtronic and DEKA Research and Development to advance other exclusive pumps, but those efforts have failed so far, Sandoz's suit says.
As Sandoz and RareGen were preparing to launch their generic late last year, United “turned its attention to the existing cartridges” from Smiths Medical, the plaintiffs contend. The companies then “completely blocked potential generic competitors from delivering treprostinil” with Smiths’ pumps.
Sandoz and RareGen tried to order Smiths pumps for their competing product, but those orders were blocked, the lawsuit says. The plaintiffs also allege that sometime before their generic launch, United purchased all remaining cartridges from Smiths and materials necessary to make future cartridges under a “secret agreement.” United disclosed the agreement in a recent annual securities filing, the suit says.
United’s recent 10-K says the company “entered into an agreement with Smiths Medical to fund the manufacture of a further supply of CADD MS-3 pumps and cartridges for use with branded Remodulin only.”
The result of the conduct, the plaintiffs say, is that United maintains a “monopoly over a large segment of the market that it does not deserve and has not earned” even after patents have expired, the suit says. Remodulin pulled in $599 million last year, or 36% of United Therapeutics’ total sales.
Under Sandoz and RareGen’s partnership, RareGen is tasked with establishing sales reps and educating physicians about generic treprostinil, while Sandoz is responsible for maintaining supply.
The plaintiffs allege unfair trade practices, restraint of trade, monopolization and more. They're asking for a judgment the companies violated trade laws, injunctive relief and damages.
If Sandoz’s allegations prove true, it’ll be the latest example of a branded drugmaker going to questionable lengths to protect a big-selling drug. Another high-profile example in recent years was Allergan’s effort to protect Restasis by transferring patents to a Native American tribe and licensing them back. The Supreme Court just this week declined taking up that case, leaving in place a lower court’s ruling that the strategy is invalid.