Antitrust suit accuses drug companies of delaying market entry of generic niacin

A class action antitrust complaint has been filed against the makers of the drug Niaspan,

a prescription medication used to treat mixed lipid disorders.

Philadelphia attorneys Dianne M. Nast and Erin C. Burns, of Nastlaw LLC, along with attorneys from New York-based Hach Rose Schirripa & Cheverie and litigators with The Dugan Law Firm in New Orleans, filed a 49-page federal complaint at the Eastern District of Pennsylvania on behalf of the New England Electrical Workers Benefits Fund and others similarly situated over allegations that the defendants violated anti-competitive laws when it schemed to delay entry of the generic version of Niaspan to the market.

The individual defendants named in the civil action are AbbVie Inc., Abbott Laboratories, Barr Pharmaceuticals Inc., Duramed Pharmaceuticals Inc., (now known as Teva Women’s Health Inc.), Duramed Pharmaceuticals Sales Corp., Teva Pharmaceutical Industries Limited and Teva Pharmaceuticals USA Inc.

The suit, which was filed on July 2, arises out of what the plaintiffs claim was the “unlawful scheme to monopolize and allocate the market for Niaspan.”

According to the complaint, Barr Pharmaceuticals had been prepared to enter the market with a generic version of Niaspan in the spring of 2005, eight years after the U.S. Food & Drug Administration gave Kos Pharmaceuticals, Inc., which was later acquired by Abbott, approval to market Niaspan.

The suit goes on to claim that in order to prevent Barr’s generic entry and maintain monopoly profits, Kos and Barr entered into an “unlawful agreement” by which Kos would pay millions of dollars over an eight-year period in exchange for Barr’s agreeing to refrain from entering the extended-release niacin into market until September of this year.

“The Market Allocation Agreement, which was disguised as supply and promotion agreements to avoid scrutiny, has effectively prevented all generic competition as a result of Barr’s 180-day exclusivity period,” the complaint reads.

To date, Kos, (and later Abbott and AbbVie), have continued to make payments to Barr, (and later Teva, which was acquired by Barr in 2008), and the defendant companies have “successfully prevented any and all generic competition from entering the extended-release niacin market in the United States,” the suit states.

The suit says that had Barr entered the market in the spring of 2005 by launching its generic version of Niaspan as planned, it would have “rapidly driven down the price for extended-release niacin. This effect would have been compounded once Barr’s exclusivity period ended and other generic versions of Niaspan came to market.

“Well aware of these market dynamics, Defendants made the conscious decision to stifle competition in exchange for a share in the monopoly profits made possible by the Market Allocation Agreement,” the suit continues.

As a result of the defendants’ alleged scheme, the complaint states, prices for extended-release niacin have been drastically higher than they would have been otherwise.

The plaintiffs seek declaratory judgment that the various agreements underlying the Market Allocation Agreement are unlawful under the federal Sherman Act.

An injunction is also sought to enjoin the defendants from continuing its scheme.

 

The federal case number is 2:13-cv-03840-JD.