Rochester Drug Co-Operative Inc., a New York drug wholesaler, has accused GlaxoSmithKline (GSK) in a New Jersey federal court of conspiring with Teva Pharmaceutical Industries Ltd. to keep a generic version of the epilepsy drug Lamictal off the market. There have been a slew of class action complaints filed against the two companies. Rochester claimed that Teva agreed to postpone a cheaper, generic version of the drug’s tablet and chewable varieties after settling GSK’s patent-infringement lawsuit related to Lamictal. Rochester contends that Teva secured its spot as the exclusive provider of generic Lamictal in 2008 thanks to GSK’s agreement not to release a generic version of its own. The wholesaler said:

While the negotiated deal benefited Teva and GSK, the deal was not structured with any concern or interest for purchasers or consumers who need treatment for epilepsy, bipolar disorder, and other medical conditions at lower prices.

Rochester accused Teva and GSK of violating the Sherman Act by conspiring not to compete and establishing a monopoly. According to Rochester, GSK recognized during the course of the suit against Teva that the court would likely invalidate a patent for Lamictal, while Teva realized it wouldn’t be ready to start producing its generic drug right away.

The wholesaler says that the two sides decided to settle in 2005 after agreeing that avoiding a determination from the court would be mutually beneficial to both GSK and Teva. But for the settlement, Rochester says that Teva’s cheaper version of the drug would have been available in 2006 rather than 2008, and would have been cheaper still if GSK hadn’t improperly agreed not to release its own generic version as per their agreement.

Rochester said the settlement therefore amounted to a restraint on trade and proposed a class covering everyone who purchased the tablets or chewables from either Teva or GSK since Feb. 17, 2008. Both drug makers have come under fire for years from direct and indirect purchasers over their settlement resolving GSK’s patent claims.

After initially winning a separate suit over the alleged conspiracy in 2014, Teva and GSK were able to get that result thrown out by the Third Circuit Court of Appeals, which declined later to reconsider its decision. The two pharmaceutical companies have said they intend to appeal to the U.S. Supreme Court, claiming that the pay-for-delay claims don’t stand up since their settlement didn’t involve cash payments. Rochester is represented by Peter S. Pearlman of Cohn Lifeland Pearlman Herrmann & Knopf LLPP. The case is in the U.S. District Court for New Jersey. It will be most interesting to see how this matter plays out.


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