Late last week, Regeneron Pharmaceuticals, Inc. filed an antitrust complaint against Amgen Inc. in the U.S. District Court for the District of Delaware. Regeneron alleges that “Amgen is engaged in a persistent exclusionary campaign to deny patients the life-saving benefits of [] Regeneron’s cholesterol-reducing medication, Praluent® (alirocumab).” According to Regeneron, the reason for Amgen’s campaign “is simple: for years, Praluent® has been the only direct competitor to Amgen’s own drug Repatha® (evolocumab) and Amgen is doing everything it can to avoid competing with Regeneron on the merits.” Praluent® and Repatha® are both PCSK9 inhibitors (“PCSK9i) intended to help patients lower their low-density lipoprotein cholesterol.
Regeneron alleges that Amgen is engaged in an “unlawful, anticompetitive bundling scheme.” According to Regeneron, this scheme forces Third-Party Payors to “jettison Regeneron’s Praluent® in favor of Amgen’s Repatha®.” Regeneron alleges that Amgen is conditioning significant rebates on its blockbuster drugs Otezla® and Enbrel® “on exclusivity or practical exclusivity” for Repatha® on Third-Party Payor formularies. Regeneron claims that “Amgen’s bundled rebate scheme further excludes competition” by pricing Repatha® below its costs such that Regeneron “cannot make a financially viable case for Praluent®.” And, according to Regeneron, Amgen’s “scheme” is working: “As a result of Amgen’s anticompetitive practices, in 2022, Regeneron stands to lose money for the first time on the formerly profitable Praluent®.”
Regeneron filed a 103-page complaint setting out the details of its claims. Among the allegations in the complaint, Regeneron alleges that Amgen has monopoly or market power in the relevant markets for PCSK9 inhibitors (“PCSK9i”) and pharmacy-dispensed PCSK9i products. Regeneron alleges that Amgen is “leveraging unrelated mega-products,” including Otezla® and Enbrel®, “to coerce intermediaries who cover and pay the majority of the costs of these drugs into eliminating competition in the much smaller PCSK9i market.” According to Regeneron, Amgen “threatens to withhold significant rebates on these blockbuster products unless Payors accept either outright exclusivity for Repatha® or else ‘equal’ formulary position.”
Regeneron contends that a number of factors together create significant barriers to entry in the pharmaceutical industry, including that:
- branded products are patent-protected;
- a company must invest substantial time and money into research and development of a new drug;
- even if a new drug shows promise in pre-clinical studies, it is then subject to years of clinical trials, during which it is tested on large cohorts of patients to determine its safety and efficacy; and
- even if these trials are successful, the drug company must compile the data and submit a new drug application to the FDA, which can take a year or more to process, and often takes considerably longer if the FDA finds deficiencies in the data or application.
Regeneron further alleges that there are also barriers unique to the PCSK9i Market and pharmacy dispensed PCSK9i Sub-Market. They contend that although PCSK9 inhibitors are a critical new drug for a high-risk population, that population is relatively small.
Regeneron also contends that biosimilar drugs also face “immense skepticism from patients and prescribers,” contributing to barriers to entry into the rheumatoid arthritis market, the market in which Amgen’s Enbrel is sold.
Finally, Regeneron describes the alleged antitrust injury it has suffered as a result of Amgen’s “scheme.” Regeneron alleges that Amgen’s conduct has already harmed and, if left unaddressed, will continue to harm competition in the U.S. PCSK9i market and pharmacy-dispensed PCSK9i sub-market. As a result, Regeneron has suffered and will continue to suffer injury to its business or property, including lost sales, business opportunities, and ability to recoup the significant investments spent on the development and U.S. commercialization of PRALUENT, including the tens of millions of dollars ordinarily required to fund clinical trials. Further, Regeneron alleges that competition in the PCSK9i market has been harmed by Amgen’s below-cost pricing and bundled conditional rebate scheme.
Regeneron has asserted ten counts in its complaint, listed below:
- Count One: Monopolization of the PCSK9i Market and Pharmacy-Dispensed PCSK9i Sub-Market Through Bundling in Violation of Section 2 of the Sherman Act
- Count Two: Attempted Monopolization of the PCSK9i Market and Pharmacy-Dispensed PCSK9i Sub-Market Through Bundling in Violation of Section 2 of the Sherman Act
- Count Three: Monopolization of the PCSK9i Market and Pharmacy-Dispensed PCSK9i Sub-Market Through Below-Cost Pricing in Violation of Section 2 of the Sherman Act
- Count Four: Attempted Monopolization of the PCSK9i Market and Pharmacy-Dispensed PCSK9i Sub-Market Through Below-Cost Pricing in Violation of Section 2 of the Sherman Act
- Count Five: Unreasonable Restraint of Trade in Violation of Section 1 of the Sherman Act
- Count Six: Sale on Condition to Exclude Praluent® in Violation of Section 3 of the Clayton Act
- Count Seven: Violation of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq.
- Count Eight: Violation of California’s Unfair Practices Act (“UPA”), Cal. Bus. & Prof. Code § 17043 et seq.
- Count Nine: Violation of California’s Cartwright Act, Cal. Bus. & Prof. Code §§ 16720, 16727
- Count Ten: Violation of New York’s Donnelly Act, § 340 of New York’s General Business Law (“GBL”)
- Count Eleven: Tortious Interference with Prospective Business Relations
Regeneron seeks an injunction, actual damages, treble damages, costs, and attorneys fees, and demands a trial by jury.
Stay tuned to Big Molecule Watch for developments on this new case.