REMS Class-Action Lawsuit Against Celgene Is First By Patients

Patients For Affordable Drugs Founder David Mitchell alleges Celgene's unlawful delay tactics like REMS obstruction kept generic versions of Thalomid and Revlimid off the market, forcing plaintiffs to pay higher costs.

While generic drugmakers have yet to be successful in stopping innovators using misusing Risk Evaluation and Mitigation Strategies (REMS) through the legal system, a patient advocate-led class action lawsuit is hoping for better fortunes in what looks to be the first non-manufacturer related complaint on the issue.

The lawsuit – filed June 14 in the US District Court for the District of New Jersey – is being led by David Mitchell, the founder of Patients For Affordable Drugs. It alleges that Celgene Corp. illegally obstructed competitors from developing generics of Thalomid (thalidomide) and Revlimid (lenalidomide), subsequently causing plaintiffs to pay more money for the branded medications.

Plaintiffs allege that Celgene has unlwafully engaged "in a multi-faceted scheme" "to delay the onset of generic competition and squeeze more multi-billion dollar years out of these products," violating federal and state antitrust laws.

In addition to using REMS obstruction as a delay tactic, the lawsuit also accuses Celgene of obtaining fraudulent patents on the procedures to ensure safe use of the drugs, as well as engaging in "sham litigation" against potential competitors who did manage to obtain samples for bioequivalence testing.

According to the complaint, Mitchell was prescribed Revlimid after being diagnosed with multiple myeloma in 2010, and paid "thousands of dollars a year" for the drug. Mitchell would have paid less if there was a generic version for Revlimid available based on the terms of his insurance.

"[Mitchell] was injured by the supra-competitive prices of Revlimid," which could cost roughly $15,000 to $20,000 for a four-week supply in 2014, the lawsuit states. It adds that Thalomid could cost $8,000 to $10,000 over the same timeframe.

The other plaintiffs include California labor union Local 39, as well as the Detectives’ Endowment Association, both of which purchased and/or provided reimbursement for some or all of the purchase price for Revlimid. No set damages claim is listed, as an amount will be determined at the trial.

A spokesman for the Association for Affordable Medicines tells the Pink Sheet that Mitchell's lawsuit is the first coming from a non-manufacturer on the issue of REMS.

Celgene says it does not comment on pending litigation.

REMS Clearly Being Misused, Lawsuit Says

The plaintiffs slam Celgene for claiming that selling samples of the drugs to generic manufacturers for bioequivalence testing would violate its REMS programs. Mylan NV has made several attempts between 2004 and the present to obtain samples of the drugs. Lannett Co. Inc. made attempts in 2006, while Dr. Reddy's Laboratories Ltd. made attempts in 2008 and 2009, the lawsuit says.

Plaintiffs point to the 2007 Food and Drug Administration Amendments Act (FDAAA), which holds that REMS programs cannot be used to impede generic competition. FDA has also issued letters to Celgene allowing it to sell samples of the drugs to the generic firms.

"Celgene’s refusal to provide samples to generic competitors based on safety concerns is a mere anticompetitive pretext, as demonstrated by the fact that on numerous occasions, Celgene has frequently allowed access to Thalomid and Revlimid samples – directly or indirectly – to non-competitor research organizations for the purpose of conducting clinical studies using the drugs," the complaint states.

Mylan filed suit against Celgene in April 2014 in New Jersey District Court contending that Celgene is attempting to prevent it from filing abbreviated new drug applications (ANDAs) for Thalomid and Revlimid by requiring wholesale distributors and specially certified pharmacies to withhold samples of the drugs and by refusing to sell the samples directly to Mylan. The Federal Trade Commission (FTC) filed an amicus brief in the case, arguing that Celgene is violating federal and state antitrust laws by withholding the samples. (Also see "FTC Backs Mylan’s REMS Antitrust Lawsuit Against Celgene" - Pink Sheet, 20 Jun, 2014.)

Mylan's lawsuit is still ongoing in district court.

Lannett Co. Inc. filed a similar suit against Celgene in 2008, although the case was settled out of court in 2011. A trial was set to begin in February 2012. (Also see "The Impact of REMS on Generic Drug Approvals and Drug Competition" - Pink Sheet, 3 May, 2012.)

Dr. Reddy's filed a citizen petition with FDA in 2009 asking the agency to enforce the FDAAA provision that says elements to assure safe use (ETASU) cannot be used "to block or delay approval” of an ANDA or 505(b)(2) application, as well as to include in REMS a provision that the sponsor “will not use REMS restricted distribution elements to assure safe use to delay or block generic competition.”

The agency, however, declined to do either, responding that its hands are tied with regard to putting the restriction into a REMS (Also see "Generic Companies Gain Little From FDA Decision On Access To REMS Drugs" - Pink Sheet, 12 Aug, 2013.).

Court disputes involving other manufacturers over REMS issues have come up in recent years as well. Actelion Pharmaceuticals Ltd. filed suit against Apotex Inc., Roxane Laboratories Inc. and Actavis in September 2012, seeking a declaratory judgment that it did not have to supply them with its pulmonary hypertension drug Tracleer (bosentan) and Gaucher disease drug Zavesca (miglustat). The parties settled in February 2014 (Also see "FTC Backs Mylan’s REMS Antitrust Lawsuit Against Celgene" - Pink Sheet, 20 Jun, 2014.).

In April 2013, Accord Healthcare Ltd. and Intas Pharmaceuticals Ltd. sued Acorda Therapeutics Inc. for access to Accord’s multiple sclerosis drug Ampyra (dalfampridine). The complaint was dismissed with prejudice one month after filing. (Also see "FTC Backs Mylan’s REMS Antitrust Lawsuit Against Celgene" - Pink Sheet, 20 Jun, 2014.)

So far, generic manufacturers have been unsuccessful in fighting REMS misuse through the court system. As the first non-manufacturer case on the issue, the class action participants are hoping for a better outcome. In a statement, Mitchell said his goal of the case is to help end the "anti-competitive behavior" by innovators.

“If we win this suit, I will donate every penny that I receive in damages to non-profits that support cancer research and lower drug prices,” Mitchell says. “This is about ending bad behavior by drug corporations and helping patients live longer.”

Lawsuit Comes Amid Congressional Efforts

Mitchell's lawsuit comes as Republicans and Democrats in Congress are attempting to find a legislative solution to misuses of REMS and non-REMS restricted distribution systems.

The Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act (S.974) and the Fair Access for Safe and Timely (FAST) Generics Act (H.R.2051) have both been proposed in recent months. (Also see "REMS Could Block ANDAs With 'Legitimate Business Justification' In Senate Bill" - Pink Sheet, 30 Apr, 2017.)

Rep. Peter Welch, D-Vt. introduced and withdrew an amendment based on the FAST Generics Act at the full House Energy and Commerce Committee's June markup of the user fee reauthorization legislation. Although he withdrew the amendment, committee Chairman Greg Walden, R-Ore., expressed interest in working with Welch on trying to reach common ground. (Also see "FDA User Fee Bill: House Cmte. Makes Technical Changes, Adds Pricing Resolution" - Pink Sheet, 7 Jun, 2017.)

The lawsuit contained support for the FAST Generics Act, which it said would "increase the penalties for conduct like Celgene’s with Thalomid and Revlimid."

Center for Drug Evaluation and Research Director Janet Woodcock affirmed at a March House Energy & Commerce Subcommittee on Health hearing on user fees that misuse of restricted distribution systems is indeed a barrier for developing certain generics, but said she was unsure whether legislation was the answer to the problem. (Also see "REMS Reform Seems Distant Goal For Generics After Limited Support At US House Hearing" - Pink Sheet, 2 Mar, 2017.)

Patent Fraud Alleged

The lawsuit further accuses Celgene of having "fraudulently obtained" patents from the US Patent and Trademark Office (USPTO) and engaging in "sham litigation" to also help delay generic competition of Thalomid and Revlimid from reaching the market.

Specifically, plaintiffs contend that Celgene obtained a series of six patents related to its plan for safe distribution of the drugs, which are directed to methods of delivering a drug to a patient while preventing exposure of a fetus or other contraindicated individual to the drugs. Thalomid was approved in 1998 with only one of the patents, but Celgene began attaching the patents to the drug in FDA's Orange Book as it obtained them. It also listed them in relation to Revlimid when it was approved in 2005.

"Celgene listed these patents in the Orange Book with the intent and purpose of discouraging thalidomide or lenalidomide ANDA filings and delaying FDA approval of any thalidomide or lenalidomide ANDA for at least thirty months," the lawsuit states.

Two of the patents were invalidated by the Patent Trial and Appeal Board (PTAB) in October 2016. (Also see "US Patent Battles May Resume Next Congress; Reps Press For IPR Reform" - Pink Sheet, 12 Dec, 2016.)

The complaint also says that Celgene withheld prior art related to its distribution method patents, contending that "had the USPTO been aware of those undisclosed prior art references, the USPTO would not have allowed any or all of the claims of the Distribution Method Patents to issue."

Separately, Celgene filed patent infringement litigation against Barr Laboratories Inc. in 2007, Natco Pharma Ltd. in 2010 and Lannett in 2015 when these companies managed to obtain samples of the drugs from a source outside of the innovator.

Celegene and Barr settled out of court in 2010. It settled with Natco in December 2015, which allows Natco to carry out a “limited volume” launch of Revlimid in March 2022, and then unlimited sales of the generic beginning in January 2026, 15 months before patents on the drug officially expire in April 2027. (Also see "Natco Doubles Down On US With Ambitious ANDA Plan" - Scrip, 22 Sep, 2016.)

Lannett's patent infringement case is still ongoing, but if the antitrust suit by Patients For Affordable Drugs is successful, it might be able to stop.