AstraZeneca Class Action Alleges Pay-For-Delay Scheme Over Seroquel XR

AstraZeneca has been hit with a class action lawsuit that claims the pharmaceutical giant impeded competition for its anti-psychotic drug, Seroquel XR, by bribing other companies to not release generic versions of the drug.

Drug distributor J.M. Smith Corp claims this behavior violates the Sherman Act which prohibits anticompetitive agreements.

J.M. Smith alleges that AstraZeneca made financial deals with Handa Pharmaceuticals and Accord Pharmaceuticals to not release their generic versions of Seroquel XR for five years.

According to the class action lawsuit, AstraZeneca’s payment to the companies “had no pre-competitive justification or other legitimate explanation.”

Allegedly, AstraZeneca agreed to not release its own generic versions of Seroquel XR, which treats bipolar disorder, depression and schizophrenia, until six months after Handa Pharmaceuticals and Accord had released theirs, to give them a head start on the market.

The AstraZeneca class action says this contributed to Handa making an estimated $233 million more and Accord making around $107.78 million more than they each would have under competitive market conditions for the generic drugs.

This deal was reportedly beneficial to AstraZeneca because it allowed them to sell more of the brand name Seroquel XR than it would have if the generic versions of the drug had been available earlier.

J.M. Smith asserts that customers would have preferred to purchase the generic drugs because they are cheaper than the name brand versions.

To support their claim that AstraZeneca knowingly made this deal in their own financial interest, J.M. Smith notes that AstraZeneca itself had released a report stating that Seroquel sales would decline upon the release of generics of the drug. Allegedly, the generic drugs were anticipated to be released in 2016 when licensing agreements for the name brand drug ended.

The Seroquel XR class action lawsuit says that the deal with Handa and Accord was struck after AstraZeneca attempted to block the release of the two companies’ generic drugs by filing patent infringement lawsuits against them. These efforts were allegedly unsuccessful.

The AstraZeneca anti-psychotic class action lawsuit states that when AstraZeneca was on the brink of losing anti-patent litigation against Handa, it made a large payment to Handa to end the patent fight, and inso doing struck the deal that ensured AstraZeneca would not release its generic drug for five years. A similar deal was allegedly later struck with Accord.

The AstraZeneca class action lawsuit asserts that J.M. Smith and other drug distributors were financially injured by AstraZeneca’s anticompetitive agreements with the two drug companies. Allegedly, the distributors paid more for the generic and name brand anti-psychotic drugs than they would have if the companies had not struck the anticompetitive deal.

J.M. Smith is represented by Garwin Gerstein & Fisher LLP, Smith & Fisher LLP, Smith Segura Raphael & Leger LLP, Faruqi & Faruqi LLP, Odom & Des Roches LLC, Heim Payne & Chorush LLP, and Berger Montague.

The AstraZeneca Seroquel XR Non-Compete Class Action Lawsuit is J.M. Smith Corp. v. AstraZeneca Pharmaceuticals LP, et al., Case No. 1:19-cv-07233, in the U.S. District Court for the Southern District of New York.

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