AbbVie Class Action Lawsuit Says Generic Competitors Were Paid Off

AbbVie faces a new class action lawsuit accusing the company of paying off its competitors to delay generic forms of a blood pressure medication, resulting in millions in profits for the drug giant.

J.M. Smith Corp., which does business as Smith Drug Co., claims AbbVie and six subsidiaries used reverse payments, or “pay-for-delay” deals, to prevent sales of the Bystolic generic. 

Forest Laboratories, which was ultimately acquired by Allergan and then AbbVie, and its successors currently manufacture the name-brand version of Bystolic, which delivers nearly $1 billion in annual sales in the U.S.

The proposed class action lawsuit alleges AbbVie and Forest used reverse payments to would-be manufacturers of generic nebivolol HCl, a beta blocker, from October 2012 to November 2013 to keep seven cheaper versions of the blood pressure medication off of the market.

According to the class action lawsuit against AbbVie, generic manufacturers began applying with the Food and Drug Administration to market generic nebivolol HCl on Dec. 17, 2011. However, no generic competitor has entered or will enter until Sept. 17, 2021, the complaint contends.

The only material difference between generic and brand name drugs is their price, the complaint explains. Generic medications are typically at least 50% to 80% less expensive when there are multiple generics on the market. 

As a result, the plaintiff says, generics constitute both an opportunity for drug purchasers to save money and a serious threat to the profits of the brand-name drug manufacturer. 

AB-rated generics “typically take 80% or more of the sales of a drug molecule from the brand name product within six months of generic entry,” the complaint says. This rapid erosion is due in part to drug substitution laws, which permit or require pharmacies to substitute generics for a brand name unless specifically ordered otherwise by a prescribing physician.

To counteract this loss in profits, AbbVie allegedly engaged in a price fixing scheme. From October 2012 through November 2013, the AbbVie class action lawsuit alleges, Forest entered into “serial deals” or reverse payments with seven generic drug manufacturers: Hetero, Torrent, Alkem, Indchemie, Glenmark, Amerigen and Watson.

As part of these deals, each manufacturer allegedly agreed not to compete with Forest or enter the market before Sept. 17, 2021, unless another generic competitor entered the market earlier. Though the precise amounts aren’t publicly available, the plaintiffs believe the “side-deals” and cash payments each exceed $15 million in value. 

According to the complaint, Forest sued generic manufacturers in March 2012, accusing them of infringing upon the patent covering Bystolic that Forest had listed in the FDA Orange Book. 

Those lawsuits caused automatic stays of FDA approval of the generic drugs, meaning the less expensive forms of Bystolic wouldn’t get approval until at least June 2015, unless the litigation was otherwise resolved, the complaint says. 

While the stays were in effect, the generic competitors fought the patent infringement suits between March 2012 and November 2013, the complaint says.

However, Forest allegedly reached reverse settlements to delay the generics’ entry into the market until 2021.

During the class period, the plaintiff and Class Members purchased “substantial amounts of nebivolol HCl directly from Forest and others at supracompetitive prices,” the complaint says — prices substantially greater than what they would have paid in the absence of the defendants’ illegal conduct.

“Every month of delayed generic competition has allowed Forest and its successors to unlawfully maintain many millions of dollars in monopoly profits from Bystolic without generic competition and allowed the Generic Competitors to share in those profits by pocketing large and unjustified payments from Forest and its successors for agreeing to delay bringing generic nebivolol HCl to market,” the AbbVie class action lawsuit states.

The plaintiff alleges that the price of branded Bystolic was artificially inflated by defendants’ conduct, thereby depriving the plaintiff and Class Members of the opportunity to purchase lower-priced generic Bystolic sooner, which they would have if given the option.

As a result, the plaintiff and Class Members claim they “have sustained substantial losses and damage to their business and property in the form of overcharges,” the class action lawsuit says.

The generic manufacturers are not named as defendants in the AbbieVie class action lawsuit.

The class action lawsuit alleges 15 violations of the Sherman Antitrust Act. The plaintiff is asking the Court to determine that this action may be maintained as a class action, and also asks that the Court enter judgments against each of the defendants.

The plaintiff also seeks damages for themselves and Class Members in an amount to be determined at jury trial, including post-judgment interest; reasonable attorneys’ fees and costs; and any other relief deemed proper by the Court.

Have you been affected by the price of Bystolic? Tell us your experience in the comments section.

The plaintiff is represented by Benjamin Heikali, Peter Kohn and Joseph T. Lukens of Faruqi & Faruqi LLP; Bruce E. Gerstein, Joseph Opper and Dan Litvin of Garwin Gerstein & Fisher LLP; Stuart E. Des Roches and Andrew W. Kelly of Odom & Des Roches LLC; Susan Segura, David C. Raphael Jr. and Erin R. Leger of Smith Segura Raphael & Leger LLP; Russ Chorush of Heim Payne & Chorush LLP; and David F. Sorensen, Caitlin G. Coslett and Daniel C. Simons of Berger Montague PC.

The AbbieVie Blood Pressure Medicine Class Action Lawsuit is J.M. Smith Corp. d/b/a Smith Drug Co., et al. v. AbbieVie Inc., et al., Case No. 3:20-cv-04581, in the U.S. District Court for the Northern District of California.

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