Major Pharmacy Chains Join cART Antitrust Litigation
On September 22, 2021, CVS, Rite Aid, Walgreen, Kroger, Albertsons, and H.E.B. filed direct purchaser actions alleging an anticompetitive conspiracy to monopolize the market for combination antiretroviral therapy (“cART”) drugs used to treat HIV infection in the U.S. District Court for the Northern District of California. They file both as direct purchasers and as assignees of distributors. The complaints join class actions pending in the same court, as previously covered on our blog. In 2018 sales of drugs including Viread, Truvada, Altripla, Vemlidy, Descovy and other HIV antitretrovirals exceeded $14 billion.
California Class Actions Regarding Gilead cART Drugs
In 2019 Gilead originally faced allegations of anti-competitive conduct with Bristol-Myers Squibb and Janssen Pharmaceuticals to maintain HIV drug prices in the face of generic competition. After a trimming of allegations in 2020, the class action allegations continued regarding potential violations of both state and federal antitrust laws regarding bilateral agreements between Gilead and the other companies.
Gilead Illegal Monopoly Allegations
In these cases, the plaintiffs allege that Gilead unlawfully acquired a monopoly in the cART drug market through a multi-faceted scheme to suppress generic competition for its branded cART drugs. In the alleged scheme, Gilead:
- Entered into a series of bilateral agreements with Bristol-Myers Squibb and non-defendant Jansen Pharmaceuticals to suppress generic competition to the three companies’ drugs,
- Intentionally degraded its own products,
- Intentionally withheld products from the market, and
- Entered into a series of patent settlement agreements with Teva among others that kept generic competition from the market.
Plaintiffs allege that absent the non-generic restraints placed into the agreements between Gilead and other manufacturers, substitutable generics would have hit the market much sooner. The allegations include continuing no-generics restraint effects on prices until January 2025 or further.
Additionally, the complaint alleges there was no underlying business objective met by the agreements unless they impaired competition, and allowed Gilead to enjoy supracompetitive profits during the period of impaired competition. Using restraints to beat generics to market was alleged to create a potential for 10 times the sales as would occur had generics been allowed on time. The United States government spends over $20 billion annually on HIV treatment, with a large portion on drugs covered in this litigation.
We are actively monitoring the development of these cases. Companies that paid all or part of the purchase price for cART drugs, including on behalf of their insureds, should evaluate the size of their purchases and consider filing suit.
Pharmaceutical Antitrust Lawyers
Schneider Wallace has successfully represented nationwide insurance companies and other sophisticated institutional plaintiffs in recovering for overcharges due to branded and generic drug and medical device price manipulation. Schedule an appointment with our legal team to learn more about filing an antitrust lawsuit. Schneider Wallace has offices in California, Texas, North Carolina and Puerto Rico and litigates in jurisdictions throughout the country in state and federal administrative agencies and courts.
CVS Pharmacy, Inc. et al. v. Gilead Sciences, Inc., No. 21-cv-07378 (N.D. Cal.); Walgreen Co., et al. v. Gilead Sciences, Inc., No. 21-cv-7374 (N.D. Cal.).