SAN FRANCISCO (CN) - Jurors on Tuesday heard opening arguments in a class-action suit centered on an alleged plot to inflate prices and reduce competition for drugs used to treat HIV.
The court on Tuesday centered on arguments from drug companies involved in that alleged plot - though the trial resumes Wednesday and is expected to continue until the end of June. U.S. District Judge Edward Chen, an Obama appointee, is overseeing the case.
In a lawsuit first filed in 2019 in a federal court in California, a group of customers accused pharmaceutical giant Gilead Sciences of a "long-running scheme" to "restrain competition" for these drugs, part of the "antiretroviral therapy" treatment regimen used to treat HIV. Among those customers were health funds and workers' unions that bought drugs for their members.
The suit accuses Gilead of anticompetitive and anti-consumer practices, including charging "exorbitant" prices for critical HIV drugs and limiting the ability of generics to come to the market. As a result, the lawsuit argues, Gilead was able to maintain "a monopoly in the market for drugs that comprise the modern HIV treatment regimen."
At the crux of the suit is whether or not Gilead Sciences brokered a deal with Teva, a Israeli generic pharmaceuticals manufacturer, to slow the entry of generic drugs to the market. Gilead, based in Foster City, California, had more than $28 billion in revenue in 2022. Teva took in more than $16 billion in 2021.
Teva, the lawsuit claims, had been "challenging the validity of Gilead's vulnerable patents," including those on HIV drugs. Rather than fighting those suits, Gilead instead allegedly entered an "anticompetitive" settlement with the company, "in exchange for which Teva [allegedly] agreed to delay marketing its generic products." Gilead also allegedly profited from this deal.
In addition, plaintiffs in the case argue, the delay gave Gilead time to move the bulk of its customers away from "TDF-based" drugs that would soon see generic versions. Drugs based on TDF, or tenofovir disoproxil, slow the progression of HIV and are also used to treat hepatitis B. Gilead first started marketing such drugs in 2001.
By the time TDF generics finally hit the market in 2017, Gilead "had switched more than 60% of its HIV product sales" to other drugs that did not have generic versions, the lawsuit argues. Meanwhile, the case alleges that "unlawful agreements," including with other pharmaceutical companies like Janssen, also limited competition on these "reformulated" drugs.
"Collectively, the unlawful agreements between Gilead and each of its coconspirators effectively foreclosed competition" on these critical drugs, plaintiffs argued in their complaint. As one example, they pointed to NRTIs - one class of antiretroviral therapy drugs - and argued that in 2018, more than 75% of all sales of these drugs were covered by agreements involving Gilead and other companies.
During opening arguments on Tuesday, drug manufacturers involved in the suit pushed back on core elements on the plaintiffs' case - arguing that deals Gilead struck with other companies, including Teva, were "pro-competitive, not anticompetitive."
Arguing for Gilead, attorney Bart Williams told jurors that by the end of the trial, they would see that there had been no payments to Gilead, no exclusivity for Teva, and no delay.
Williams also pushed back on claim that some of Gilead's HIV-drug patents were not valid, instead arguing that Gilead had effectively let Teva sell its generic drugs "early."
"If a generic company enters the market before the brand's patents expire, that is early entry," Williams said - "not delayed entry."
Representing Teva, attorney Chris Holding took a similar tack. If exclusivity was indeed part of the deal between Teva and Gilead, corporate officials at Teva did not know, he said.
Teva knew that Gilead's patents would likely block generic competition, Holding said, and the company did not trade its entry date for a payment to Gilead. He argued "there's no pay for delay here" - though with this massive and complex lawsuit just beginning, plaintiffs may still have plenty of time to convince jurors otherwise.
Source: Courthouse News Service