Most disputes between pharmaceutical companies and generic drugmakers end in settlements. Five years of class-action litigation over a Takeda Pharmaceutical gastrointestinal drug culminated this week in a jury awarding nearly $885 million in damages to pharmacies and wholesalers who had alleged that one such settlement illegally kept generic competition from entering the market.
That exact sum could change with additional court proceedings, but when the court enters into final judgement in the case, Takeda will be responsible for paying much more. Under federal antitrust law, damages are automatically tripled. That would put Takeda on the hook for more than $2.6 billion.
The case concerns the constipation drug Amitiza. The twice-daily capsule was developed by Sucampo Pharmaceuticals. In 2004, prior to Amitiza’s 2006 FDA approval, Sucampo and Takeda entered into an agreement to share in the development and commercialization of the drug.
Takeda terminated its partnership with Sucampo in 2024 and no longer sells Amitiza. But a decade earlier, Takeda had faced litigation with generic drug manufacturer Par Pharmaceutical, which had filed suit challenging the drug’s patents. Under the terms of Takeda’s settlement with Par, Takeda paid Par and the generic drugmaker agreed to keep its drug off the market until 2021. Such payments are called reverse payments because money flows from the branded company to the generic one. The practice has also been described as “pay for delay” as these payments essentially postpone the launch of generic competition.
Takeda contends its settlement was consistent with the framework of the Hatch-Waxman Act, the 1984 law that created a framework for generic drugs in the U.S. The pharma company also says the agreement permitted a 2021 launch of Par’s authorized generic in 2021, which was six years before Amitiza’s patents expired and 17 months before Par’s own abbreviated new drug application was approved. Takeda also noted that other generics entered the market at their licensed entry dates.
The plaintiffs argued that the Amitiza patent that matters is the one for lubiprostone, the active pharmaceutical ingredient in the Takeda drug. That patent expired in 2014. The other patents associated with the drug had later expiration dates, but in the complaint, the plaintiffs describe them as “weak, easily-designed around patents standing in the way of generic market entry.” Without generic competition, the plaintiffs, alleged they suffered financial harm from paying “many hundreds of millions of dollars in overcharges as a result of the defendants’ conduct,” according to the complaint.
In a prepared statement, Takeda said it is disappointed in the trial outcome. The company also believes there were “evidentiary and legal errors made during the trial,” though it did not specify them.
“We remain firm in our conviction that the plaintiffs’ case lacks merit, and we will vigorously pursue post-trial motions and an appeal,” Takeda said.
The case, FWK Holdings LLC, Meijer Inc., and Meijer Distribution v. Takeda Pharmaceutical Company Limited, Takeda Pharmaceuticals U.S.A. Inc., Endo International Plc, and Par Pharmaceutical, Inc., was heard in federal court in Boston. The case number is 1:21-cv-11057-GAO and 1:21-cv-11255-GAO.
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