A U.S. appeals court has dismissed a complaint against AbbVie and its subsidiary Allergan, which were accused of using "unlawful 'reverse' settlement payments" to keep generic drugmakers from introducing competitive equivalents to the blood pressure drug Bystolic.
The lawsuit was brought by purchasers of Bystolic — originally manufactured by Forest Laboratories — including pharmacy companies Walgreens, CVS and Rite Aid and health care purchasers like the city of Baltimore and various Teamster health plans.
In the lawsuit, plaintiffs said after Forest Laboratories reached a patent-infringement settlement in December 2017, in which seven generic manufacturers agreed they would forgo the launch of their products for several years, Forest then paid those generic manufacturers for goods and services.
The payments by Forest Laboratories, the lawsuit said, amounted to payoffs to keep the generic versions of Bystolic from going to market.
In 2014, Forest was acquired by pharmaceutical company Activis, which merged in 2015 with Allergan, which was acquired by AbbVie in 2019. The lawsuit names Forest and its successor companies.
Although the U.S. District Court for the Southern District of New York twice dismissed the case brought by the purchasers for failure to state a claim, the case went to the 2nd U.S. Circuit Court of Appeals, according to a press release by law firm White & Case.
On May 13, the appeals court affirmed the lower court's dismissal, saying the plaintiffs failed to provide evidence that "any of Forest's reverse payments were unjust or unexplained," the release said. (Read the decision below.)
White & Case said in the release that the win was noteworthy because the antitrust litigation marks the first time the 2nd Circuit has applied a standard set by a 2013 U.S. Supreme Court decision in the case Federal Trade Commission v. Actavis Inc. White & Case also represented Actavis in that case.
In the Actavis case. the high court said reverse payments can sometimes violate antitrust laws, but they need to be large and unjustified, the appeals court decision states. If a brand-name drugmaker is paying a rival generic firm "fair value for goods or services exchanged as part of a bona fide commercial relationship," the payments would not be unlawful, the decision states.
