In a victory for AbbVie (ABBV), a U.S. federal judge ruled the drug maker did not unfairly thwart competition by striking deals with other companies that resolved patent lawsuits, but also resulted in delaying lower-cost biosimilar versions of its Humira medicine for several years.
A lawsuit filed last year by unions, insurers and the city of Baltimore alleged that AbbVie “abused the patent system” and “erected significant barriers to entry to block biosimilar competition” by filing dozens of patents for Humira, its franchise product. Some of the more than 100 Humira patents — sometimes described as a “patent thicket” — extend to 2034.
Over the past few years, AbbVie also settled patent lawsuits filed by several other drug makers – including Pfizer (PFE) and Amgen (AMGN) – that sought to sell biosimilar versions of Humira, a rheumatoid arthritis treatment, in the U.S. A biosimilar is a nearly identical variant of a brand-name biologic medicine that yields the same health outcome, but at a lower cost.
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This is a complex area of law and, unsurprisingly, the U.S. District Court Judge, Shah, got it wrong. The judge was correct (to the extent) that AbbVie was taking advantage of existing laws (some might say “loopholes”), but ignored a seminal point as to the intent behind doing so. Intent as in a racketeering conspiracy, perhaps? Read on.
AbbVie was helped along by very competent attorneys, no doubt paid for by the typical $5K/injection cost of Humira. At the average Rx of an injection every two weeks that’s $130K/yr. Great drug btw, helped many folks, and now it’s well time for a biosimilar in the U.S.
Plaintiffs, unfortunately, made the same old, tired arguments. The opportunity existed to seek a RICO charge essentially alleging that AbbVie, or other big pharma companies utilizing similar “patent blizzard” actions, are engaging in racketeering. To the bold go … and all that.
Yeah, I know that when RICO is mentioned many think of the mob and how the RICO laws were used against the mob families in the 80’s and 90’s. NOW, think about what prosecutors alleged then and ask yourself if it applies today?
Of course, we know the folks who head up big pharma companies are paragons of virtue – but maybe, just maybe, there’s a case to be made about a pattern of, ahem, questionable behavior, over time, conducted in concert with others – all designed to fleece consumers and smaller generic manufacturers.
Short of changing the meaning of patents, what did the parties expect? Patents confer exclusivity, so this decision looks right. If the payers believe AbbVie’s patents are invalid, they could support a launch at risk. Only an injunction — not easy to obtain for patents of disputable validity or infringement — would stop such a launch. The risk: damages up to AbbVie’s lost profits. The benefit of earlier biosimilar entry may not be that great since market penetration historically has been slow and price reductions only about 20%. So maybe it’s not worth payers indemnifying a biosimilar company to launch when balancing a downside prospect of tens of billions in damages against an upside of possibly less than a billion dollars in savings.
It looks like the headline should read “is immunized” no?
I respectfully and vehemently djsagree with Professor Feldman. This type of so-called interlocking behavior to maintain monopoly via patent thicket is routine, commonplace, and ubiquitous within the high tech industry.
So why would the pharmaceutical industry be any different?
Respectfully and vehemently, two wrongs do not make things right. The greed and graft that is the Rx industry has resulted in a gilded group that cares almost nothing about the health of people and everything to do with how much money can be made. This is not sustainable, and continues to cause massive amounts of human suffering. Defenders of these tactics are part of the problem…..sterile and detached application of patent law, with no consideration of the unintended harm of rulings to patients and payers, is the real problem here.