In an opinion released last Friday, Judge Kent A. Jordan of the U.S. District Court for the District of Delaware denied Abbott's motion to dismiss numerous antitrust claims in Abbott Labs et al. v. Teva Pharms. et al., No. 02-1512.
The antitrust claims were originally brought by Teva and Impax as counterclaims in patent infringement litigation concerning Abbott's TriCor (fenofibrate) drug product, a treatment for high cholesterol and triglycerides. Later, various pharmacies and third-party payors filed related antitrust claims against Abbott, and those cases were consolidated with the patent infringement cases. The antitrust plaintiffs are seeking treble damages from Abbott.
Teva and the other antitrust plaintiffs allege that Abbott responded to the threat of generic entry by changing the formulation of TriCor, not to improve the product but simply to prevent generic formulations from becoming AB-rated for substitution with TriCor. Pharmacists may substitute a generic equivalent for a branded drug only if the generic drug has been AB-rated by the FDA, which means not only that the generic drug is bioequivalent to the branded drug, but also that the generic has the same form, dosage, and strength.
If true, Teva's allegations reveal how Abbott employed some very creative "life-cycle management" strategies for TriCor:
- 1998: Abbott receives FDA approval for TriCor capsules;
- 1999: Teva files ANDA for TriCor capsules, with Paragraph IV certification to U.S. Pat. No. 4,895,726, covering the TriCor capsule formulation;
- 2000: Abbott sues Teva for patent infringement, initiating a 30-month stay;
- early 2001: Abbott files a new NDA for 54 mg and 160 mg TriCor tablets, submitting capsule safety and efficacy data as support;
- Sep. 2001: FDA approves Abbott's TriCor tablets NDA; Abbot withdraws capsules from market and changes the code for TriCor capsules in the National Drug Data File ("NDDF") to "obsolete," meaning pharmacies can no longer fill TriCor prescriptions with a generic capsule formulation;
- Mar. 2002: N.D. Ill. grants summary judgment of non-infringement to Teva in the capsule litigation;
- Apr. 2002: FDA approves Teva's ANDA for TriCor capsules;
- Jun. 2002: Teva files ANDA for 54 mg and 160 mg TriCor tablets, with Paragraph IV certification;
- Oct. 2002: Abbott sues Teva for infringing its patents on TriCor 54 mg and 160 mg tablets, initiating another 30-month stay; Teva files counterclaims for antitrust violations;
- Mar. 2003: Fed. Cir. affirms summary judgment in capsule litigation;
- 2003-2005: Abbott files a new NDA, for 48 mg and 145 mg TriCor tablets, seeking a label change stating that the new tablets need not be taken with food (the "no food effect label");
- May 2005: D. Del. grants partial summary judgment of non-infringement to Teva in the tablets litigation; FDA then grants final approval to Teva's ANDA for 54 mg and 160 mg TriCor tablets; Abbott voluntarily dismisses remaining patent infringement claims.
Teva is pursuing ten separate antitrust claims against Abbott, including Sherman Action monopolization and sham litigation violations, Walker Process violations, and state law tortious interference with valid business expectations. In opposition to Teva's motion to dismiss, Abbott unsuccessfully argued that changing its TriCor formulation did not violate federal antitrust law; that any actions taken in its patent infringement litigation are immune under the Noerr-Pennington doctrine because Teva did not adequately plead the litigation was a sham; and that the state law allegations failed to state a claim.
While acknowledging that "[o]ne of the benefits of competition is the introduction of new, improved products," the court relied on the Microsoft case, 253 F.3d 34 (D.C. Cir. 2001) and the "nature of the pharmaceutical drug market," to determine that Teva's antitrust counterclaims should proceed and be analyzed under the "rule of reason." According to Judge Jordan's opinion, "The per se standard proposed by Defendants presupposes an open market where the merits of any new product can be tested by unfettered consumer choice. But here, consumers were not presented with a choice between fenofibrate formulations. Instead, [Abbott] allegedly prevented such a choice by removing the old formulations from the market while introducing new formulations.
As the antitrust case moves forward, "Plaintiffs [will] not [be] required to prove that the new formulations were absolutely no better than the prior version or that the only purpose of the innovation was to eliminate the complementary product of a rival. Rather, as in Microsoft, if Plaintiffs show anticompetitive harm from the formulation changes, that harm will be weighed against any benefits presented by Defendants."