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Appeals panel agrees AbbVie didn't violate antitrust laws with Humira 'patent thicket'

COOK COUNTY RECORD

Saturday, December 21, 2024

Appeals panel agrees AbbVie didn't violate antitrust laws with Humira 'patent thicket'

Lawsuits
Abbviehqe 004

A federal appeals panel has agreed with a lower court’s ruling that ended a lawsuit challenging drugmaker AbbVie’s attempts to protect its exclusive rights on Humira, described as “one of the world’s best-selling and most profitable drugs.”

Judge Frank Easterbrook wrote the U.S. Seventh Circuit Court of Appeals opinion issued Aug. 1; Circuit judges Diane Wood and Thomas Kirsch concurred.

In June 2020, U.S. District Judge Manish Shah sided with North Chicago-based AbbVie in a nationwide slew of lawsuits accusing the pharmaceutical company of antitrust violations. The lawsuits were rooted in allegations AbbVie disingenuously obtained 132 additional patents related to Humira before the original expired in 2016, allowing the company to keep generic versions off the shelves until 2034.


U.S. Seventh Circuit Court of Appeals Judge Frank Hoover Easterbrook

Humira’s active ingredient is the anti-inflammatory adalimumab, according to court documents. It is a monoclonal antibody used to treat a range of conditions, including rheumatoid arthritis, plaque psoriasis, ulcerative colitis and Crohn’s disease, among others.

A host of class action lawsuits, led by labor union benefit plans, the city of Baltimore and others, targeted AbbVie in 2019. Both the United Food and Commercial Workers International Union Local 1500 Welfare Fund and the Fraternal Order of Police, Miami Lodge 20, Insurance Trust Fund, sued the company in Chicago federal court. The lawsuits contained similar claims, and were consolidated into one action, before Judge Shah, who dismissed the complaint.

On appeal, Easterbrook explained, the plaintiffs restated their argument “that 132 patents are just too many for anyone to hold, especially when they are weak and subject to challenge, and that by establishing what plaintiffs call a ‘patent thicket’ AbbVie violated” the Sherman Anti-Trust Act.

The panel first noted Humira isn’t covered under the Hatch-Waxman Act, which regulates copycat drugs, because it’s based on a biological substance, not a synthetic, and therefore falls under the Biologics Price Competition and Innovation Act. Under the former, patent litigation can stall a competitor from entering the marketplace. Under the latter, a company that wins Food and Drug Administration Approval can start selling before patent litigation is resolved.

“None of AbbVie’s potential competitors chose to launch at risk, even after the FDA’s approval,” Easterbrook wrote. “This sets up the payors’ contention that the sheer number of arguably applicable patents scared off the competitors and enabled AbbVie to collect monopoly profits not authorized by the expired (Humira) patent.”

However, the panel noted, patent law contains no caps on how many patents any entity can hold. Easterbrook listed tech companies with “much larger portfolios of patents” and noted Thomas Edison alone held 1,093. He said the Federal Trade Commission challenged Qualcomm’s patent practices based in licensing terms instead of patent mass, and lost regardless in 2020.

The plaintiffs didn’t try to prove “all 132 patents are invalid or inapplicable to all potential biosimilar competitors,” Easterbrook wrote, “and it is far from clear that payors would have standing to make such an argument.”

When AbbVie filed patent applications, it bore the cost of doing so without imposing expense on potential competitors, the panel said. It further noted AbbVie isn’t trying to invoke entirely irrelevant patents to protect Humira, and even if that were the case it would be a matter for potential competitors to bring to court.

“A separate antitrust suit by strangers to the patent litigation does not justify an effort to adjudicate by proxy what might have happened in the patent litigation, but didn’t,” Easterbrook wrote. “What did happen in the patent litigation is settlement.”

Under those terms, the panel explained, drugs similar to Humira will enter the U.S. market in 2023. But the antitrust plaintiffs argued that is the result of a deal in which AbbVie allowed competitors in the European Union to sell a Humira-like medication starting in 2018, which they say constitutes an illegal payoff. Shah disagreed, as did the appeals panel, saying corporate calculations on opportunity cost differ legally from implicit payments.

“In the United States AbbVie struck a normal settlement without any payment to the entrants,” Easterbrook wrote. “In Europe AbbVie and the potential entrants struck the same kind of deal, which is proper for the same reason. In each AbbVie agreed to entry before the last patents expired and didn’t pay anyone to delay entry. As the district judge saw things, 0 + 0 = 0. We see this the same way.”

Plaintiffs were represented by attorneys from several firms, including: Labaton Sucharow; Hagens Berman Sobol Shapiro; Girard Sharp; the Dugan Law Firm; Robbins Geller Rudman & Dowd; Seeger Weiss; Freed Kanner London & Millen LLC; Fine, Kaplan and Black RPC; Meyers & Flowers; Wexler Wallace; Lite Depalma and Greenberg; Shepherd, Finkelman, Miller & Shah; Scharf Banks Marmor; Freedman Boyd Hollander Goldberg Urias & Ward; Kessler Topaz Meltzer & Check; Cohen Milstein Sellers & Toll; Lockridge Grindal Nauen; Bransetter Stranch & Jennings; Heins Mills & Olson; and Grant & Eisenhoffer.

AbbVie was represented by the firm of Kirkland & Ellis.

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