AbbVie's 'Unjustified' Humira Settlements Divide Market, Class Action Claims

First suit challenging biosimilar litigation settlements ratchets up pressure on AbbVie's "patent thicket" and licensing strategy.

A proposed class action against AbbVie Inc. and seven biosimilar makers shows potential fault lines of biosimilar patent litigation settlements and intensifies the pressure on AbbVie's Humira (adalimumab) patent estate.

The UFCW Local 1500 Welfare Fund, the largest grocery-worker union in New York state, filed a March 18 suit in the US District Court for the Northern District of Illinois against AbbVie and the companies with whom it has inked patent settlement and licensing deals. The complaint was brought on behalf of the union and other indirect purchasers who are alleged to have overpaid for Humira due to the lack of lower cost biosimilar versions of the drug.

The other defendants are Amgen Inc., Samsung Bioepis Co. Ltd., Mylan Pharmaceuticals Inc., Sandoz Inc., Fresenius Kabi AG, Pfizer Inc. and Momenta Pharmaceuticals Inc.. AbbVie inked deals that allowed them to launch biosimilar versions of Humira in Europe beginning in October 2018 and in the US in 2023. Coherus BioSciences Inc. also entered into a settlement with AbbVie but it is not named in the complaint. The day it announced the settlement, Coherus sued Amgen for infringing three of its adalimumab formulation patents. (Also see "Biosimilar Vs. Biosimilar: Coherus Sues Amgen For Infringing Adalimumab Formulation Patents" - Pink Sheet, 26 Jan, 2019.)

"The agreements, while announced as settlements or licensing agreements, operate as unlawful market division between the U.S. and European markets," the complaint states. "As in the U.S., AbbVie had Humira patent protection in Europe. But AbbVie ceded the European market to biosimilar competition – despite that patent protection – in exchange for maintaining its monopoly in the U.S."

The suit says AbbVie's price for Humira in Europe has remained significantly lower than in the US so competition in Europe affects its profits far less than would competition in the US.

Humira, used to treat rheumatoid arthritis and other auto-immune diseases, is the top-selling drug in the world with revenue of $19.94bn in 2018. AbbVie reported in January that it expects ex-US revenue erosion of 30%. (Also see "AbbVie’s Downward Humira Guidance Worries Analysts" - Scrip, 25 Jan, 2019.)

The proposed class action class includes those who indirectly purchased, paid, and/or provided reimbursement for some or all of the purchase price of Humira from at least as early as Jan. 1, 2017 until the effects of the defendants' conduct cease. They claim restraint of trade under the Sherman Act and violations of state consumer protection laws.

The suit is similar to complaints challenging patent litigation settlements between brand name and generic manufacturers and shows how deals involving biosimilars might be vulnerable to antitrust claims.

UFCW recently filed suit against Amgen and Teva Pharmaceutical Industries Ltd. on behalf of itself and other indirect purchasers of Sensipar (cinacalcet) alleging that an agreement between Amgen and Teva delayed entry of a lower-priced generic. (Also see "Cipla, Piramal Launch Sensipar Generics Amid Growing Antitrust Challenges to Amgen/Teva Settlement" - Pink Sheet, 12 Mar, 2019.) The union is represented in both suits by the plaintiffs firm Labaton Sucharow.

No 'Business Justification' For Agreements

The Humira complaint argues that AbbVie's settlements are anticompetitive under the Supreme Court's 2013 FTC v. Actavis decision, which held that settlements should be scrutinized under the "rule of reason" to determine if they violate antitrust laws. The court said the likelihood a settlement has an anticompetitive effect depends on its size, scale in relation to anticipated future litigation costs, and justification.

"Even if the conduct alleged in this complaint is held subject to the Rule of Reason, there is no legitimate, non-pretextual, procompetitive business justification for the value Defendants Amgen, Bioepis, Mylan, Sandoz, Fresenius, Pfizer and Momenta received that outweighs the arrangement's harmful effects," the complaint says.

In exchange for agreeing to delay entering the US market until 2023, they received the opportunity to launch their biosimilars in Europe well before 2023, the complaint states. "Absent the arrangement with AbbVie, Defendants' sales of their biosimilar versions of Humira would have been made by AbbVie and thus represent a transfer of value from AbbVie to the remaining Defendants."

The value that AbbVie transferred and the other defendants received under their agreements "exceeded the costs of continued litigation or any arguably procompetitive benefits – and thus was "large and unjustified," the suit says.

The plaintiffs seek to enjoin AbbVie from maintaining and enforcing its patent thicket; disgorgement, restitution, and the creation of a trust to remedy defendants' unjust enrichment; and damages to be determined at trial.

Congressional Criticism

FDA has approved three Humira biosimilars to date: Amgen's Amjevita (adalimumab-atto), Boehringer Ingelheim GmbH's Cyltezo (adalimumab-adbm) and Sandoz's Hyrimoz (adalimumab-adaz). Boehringer has continued to battle AbbVie's infringement suit rather than enter into a settlement. It contends that AbbVie has "unclean hands" from amassing more than 100 patents on Humira. (Also see "Does AbbVie Have 'Unclean Hands' From Building Humira Patent Thicket? Judge Allows Discovery" - Pink Sheet, 20 Jun, 2018.)

AbbVie responded that that there is nothing "unconscionable" about obtaining patents that cover a competitor's product or seeking to enforce them. (Also see "AbbVie Inks Sixth Humira Biosimilar Settlement, Battles Boehringer's 'Unclean Hands' Claim" - Pink Sheet, 8 Nov, 2018.) A Markman hearing, in which the judge determines the meaning of disputed words in the suit, has been scheduled for April 16.

AbbVie has faced a barrage of criticism for its Humira patent portfolio. At the Senate Finance Committee hearing on drug pricing last month, Sen. John Cornyn, R-TX, asked AbbVie CEO Richard Gonzalez if his company's position is that it should have an exclusive monopoly on the medication for 31 years. (Also see "From Pricing To Patents: Hearing Signals A Potential New Focus" - Pink Sheet, 27 Feb, 2019.)

Legislation was introduced earlier this month by a bipartisan group of senators, including Sen. Susan Collins, R-Maine, to cut through patent thickets. The Biologic Patent Transparency Act would require companies to publicly disclose the web of patents that protect their biologics and require FDA to publish information in its "Purple Book."

The complaint also quotes comments FDA Commissioner Scott Gottlieb has made about company efforts to delay biosimilar competition, though he did not specifically mention Humira.

While its patent policy has been under fire, this is the first time AbbVie's settlements have been challenged and the complaint shows how future disputes may be framed. Attorneys have been waiting to see what kind of agreements would spark antitrust suits by the Federal Trade Commission or other plaintiffs. (Also see "Biosimilar Patent Settlements: What Terms May Spur Antitrust Actions? " - Pink Sheet, 7 Oct, 2018.) 

There has been one other biosimilar antitrust complaint, which involves commercial marketing practices. Pfizer alleges that Johnson & Johnson sought to block patient access to its biosimilar version of Remicade (infliximab) through exclusive contracting with payers and insurers and multi-product bundled rebates. Filed in September 2017, that suit is ongoing.