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`BERRY SILBERBERG STOKES PC
`JOSHUA C. STOKES, State Bar No. 220214
`CAROL M. SILBERBERG, State No. 217658
`6080 Center Drive, Sixth Floor
`Los Angeles, CA 90045
`Telephone: (213) 986-2690
`Facsimile: (213) 986-2677
`jstokes@berrysilberberg.com
`csilberberg@berrysilberberg.com
`Attorneys for Plaintiff
`Humana Inc.
`
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`HUMANA INC.,
`
`Plaintiff,
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`v.
`TEVA PHARMACEUTICALS USA, INC.,
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`Defendant.
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`Case No.
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`COMPLAINT AND DEMAND FOR
`JURY TRIAL
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`Table of Contents
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`Page
`INTRODUCTION ........................................................................................................................... 1
`NATURE OF THE ACTION .......................................................................................................... 2
`JURISDICTION AND VENUE ...................................................................................................... 4
`PARTIES ......................................................................................................................................... 5
`CO-CONSPIRATORS ..................................................................................................................... 7
`REGULATORY BACKGROUND ................................................................................................. 7
`A.
`The Regulatory Structure for Approval of Generic Drugs and the Substitution of
`Generic Drugs for Brand Name Drugs..................................................................... 7
`The Hatch-Waxman Amendments. .......................................................................... 8
`B.
`Paragraph IV Certifications...................................................................................... 9
`C.
`The Benefits of Generic Drugs. ............................................................................. 13
`D.
`The Impact of Authorized Generics. ...................................................................... 14
`E.
`ANTICOMPETITIVE CONDUCT ............................................................................................... 16
`A.
`The Origin of Gilead’s cART Franchise. ............................................................... 16
`B.
`Gilead and BMS Enter into a No-Generics Restraint Agreement Related
`to Atripla. ............................................................................................................... 17
`Gilead Enters into a Pay-for-Delay and No-AG agreement with Teva Related to
`Viread. .................................................................................................................... 22
`Gilead and BMS Enter into Pay-for-Delay Agreements Related to Truvada and
`Atripla. ................................................................................................................... 34
`BMS and Teva enter into a Pay-for-Delay agreement related to Atripla. .............. 34
`Gilead and Teva enter into a Pay-for-Delay agreement related to Truvada and
`Atripla. ................................................................................................................... 36
`INTERSTATE COMMERCE ........................................................................................................ 46
`MARKET POWER ........................................................................................................................ 46
`MARKET EFFECTS ..................................................................................................................... 48
`TOLLING ...................................................................................................................................... 49
`IMPACT AND CONTINUING INJURY TO PLAINTIFF .......................................................... 50
`CLAIMS FOR RELIEF ................................................................................................................. 53
`COUNT I: .......................................................................................................................... 53
`COUNT II: ......................................................................................................................... 55
`COUNT III: ........................................................................................................................ 57
`COUNT IV: ........................................................................................................................ 61
`COUNT V: ......................................................................................................................... 64
`DEMAND FOR JUDGMENT ....................................................................................................... 65
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`1)
`2)
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`C.
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`D.
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`JURY DEMAND ........................................................................................................................... 66
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`Plaintiff Humana Inc. (“Plaintiff”) brings this civil action against Defendant Teva
`Pharmaceuticals USA, Inc. (“Teva” or “Defendant”) under United States antitrust laws and the
`laws of various states. Plaintiff alleges as follows:
`INTRODUCTION
`Since 1981, more than 35 million people worldwide and 700,000 people in the
`1.
`U.S. have died from Human Immunodeficiency Virus (“HIV”) infection. Despite the advent of
`numerous drugs over the past twenty years, the disease continues to affect millions of Americans.
`As of 2017, more than 1.1 million people in the U.S. were living with HIV and nearly 40,000 new
`patients are diagnosed with the disease each year.
`“Gilead” (Gilead Sciences, Inc., Gilead Holdings, LLC, Gilead Sciences, LLC
`2.
`(f/k/a Bristol-Myers Squibb & Gilead Sciences, LLC), and Gilead Sciences Ireland UC (f/k/a
`Gilead Sciences Limited)) dominates the market for antiretroviral drugs, which are essential to
`effective HIV treatment. It manufactures three of the four best-selling HIV drugs on the market,
`as well as many other drugs that are used in HIV combination antiretroviral therapy (“cART”).
`Presently, more than 80% of U.S. patients starting an HIV drug treatment regimen take one or
`more of Gilead’s products every day.
`Several of Gilead’s HIV medications cost less than $10 to produce; yet for nearly
`3.
`20 years, Gilead has charged health plans like Plaintiff thousands of dollars for a 30-day supply.
`With yearly sales in the U.S. exceeding $13 billion, Gilead has extracted enormous profits from
`its HIV drugs.
`Gilead’s ability to sustain supracompetitive profits in its multi-billion-dollar HIV
`4.
`treatment franchise has been engineered through a comprehensive, illegal scheme to blockade
`competition. Beginning in 2004, Gilead entered into a series of anticompetitive agreements with
`competing cART drug makers to:
`
`• Create branded combination drugs, with express bans on using generic
`components to create competitive drugs even after patents on the combination
`drugs expired; and
`• Delay market entry by competing generic manufacturers for years beyond the date
`that Gilead’s patents would have been invalidated, in exchange for protecting the
`generic manufacturers from competition at the point of delayed entry.
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`All of these anticompetitive agreements and actions combined to insulate Teva’s
`5.
`and Gilead’s product portfolio from the drastic price erosion that would have occurred with
`effective competition, and resulted in billions of dollars in annual excess profits that accrued (and
`continue to accrue) to Gilead and Teva.
`As further explained below, Teva’s anticompetitive schemes with Gilead involved
`6.
`unlawful contracts, combinations and restraints of trade in the markets for cART regimen drugs
`and unlawful monopolization in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C.
`Sections 1 and 2, and various states’ laws.
`As a result of Teva’s anticompetitive conduct with Gilead, Plaintiff paid more for
`7.
`cART regimen drugs than it otherwise would have paid in the absence of Teva’s unlawful
`conduct with Gilead and has sustained, and continues to sustain, damages in the form of
`overcharges paid for its members’ prescriptions of cART regimen drugs.
`Plaintiff seeks redress for the harm it has sustained as a result of Teva’s violations
`8.
`of Sections 1 and 2 of the Sherman Act, 15 U.S.C. Sections 1 and 2, and various states’ laws.
`Plaintiff also seeks injunctive relief pursuant to Section 16 of the Clayton Act, 15 U.S.C. Section
`26.
`
`NATURE OF THE ACTION
`Combination antiretroviral therapy regimen drugs are commonly used to treat
`9.
`patients with HIV. HIV can result in Acquired Immunodeficiency Syndrome (“AIDS”) and
`death. Modern antiretroviral cART drug regimens comprise a combination or “cocktail” of drugs,
`most often consisting of two nucleotide/nucleoside analogue reverse transcriptase inhibitors
`(“NRTIs”) taken with at least one antiretroviral drug of another class, such as an integrase
`inhibitor, commonly referred to as “third agents.” Tenofovir, one of the principal NRTIs used in
`cART regimens, was discovered more than 30 years ago and has long since lost any patent
`protection.
`In 2001, Gilead began marketing tenofovir disoproxil (“TDF”) as Viread. TDF is
`10.
`a “prodrug” of tenofovir, meaning that TDF has slight alterations from tenofovir, and, in the
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`body, TDF metabolizes into tenofovir. Considering these slight alterations, Gilead’s patents on
`TDF were weak and vulnerable to attack by generic competitors.
`In 2003 and 2004, Gilead began marketing emtricitabine (commonly, “FTC”) as
`11.
`Emtriva. It then launched a fixed-dose combination (“FDC”) drug comprised of TDF and FTC
`called Truvada. Like TDF, FTC became a principal NRTI, and the two together were described
`as the “[r]ecommended NRTI backbone for most initial [cART] regimens.”1 However, also like
`TDF, Gilead’s patent protection on FTC was weak, as Gilead obtained its rights to FTC from
`others who had publicly disclosed FTC over ten years earlier.
`In December 2004, Gilead entered into an agreement with “BMS” (Bristol-Myers
`12.
`Squibb Company, and E.R. Squibb & Sons, L.L.C.) to combine Gilead’s Truvada (TDF/FTC) and
`BMS’s Sustiva (efavirenz, “EFV”) into an FDC named Atripla (TDF/FTC/EFV). At the time,
`Gilead expected imminent challenges to its patents covering Truvada and sought to combine
`Truvada with Sustiva so that the resulting combination would be protected by BMS’s patents.
`Gilead and BMS aggressively promoted Atripla and induced physicians and patients to switch
`their prescriptions from other TDF-based drugs to Atripla, knowing that those physicians and
`patients would be reluctant to switch back to their earlier, standalone drugs when generic versions
`of those drugs became available. As a result, Gilead and BMS could continue to charge
`supracompetitive prices for Atripla even after standalone generic versions of the Atripla
`components launched.
`The Gilead-BMS Atripla agreement included a “No-Generics Restraint” clause,
`13.
`which barred both parties from using generic versions of each other’s standalone drugs to make
`partially-generic versions of Atripla, even after the patents on their standalone drugs expired. For
`example, BMS could not make a combination drug that would compete with Atripla consisting of
`generic Truvada (TDF/FTC) and Sustiva (EFV).
`In 2009, Teva challenged Gilead’s TDF patents. Gilead responded by suing Teva
`14.
`and then entering into an unlawful reverse payment settlement agreement with Teva, with the
`
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`1 HHS Panel on Antiretroviral Guidelines for Adults and Adolescents (Nov. 13, 2014),
`https://clinicalinfo.hiv.gov/en/guidelines/archived-guidelines/adult-and-adolescent-guidelines.
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`intent and effect of eliminating Teva’s patent challenges to Gilead’s core group of TDF-based
`drugs: Viread, Truvada, and Atripla.
`In February 2013, the day before trial, Gilead and Teva announced a settlement
`15.
`that delayed the introduction of generic Viread by more than 4.5 years until December 15, 2017,
`only six weeks before Gilead’s TDF patents were set to expire. In exchange, Gilead granted Teva
`six weeks of exclusivity as the only seller of generic Viread — a deal that was worth over $100
`million to Teva.
`Then, in February 2014, the day before closing arguments in a trial concerning
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`Gilead’s FTC patents, Gilead and Teva announced another settlement. This one delayed the
`introduction of generic Truvada and Atripla by more than 6.5 years until September 30, 2020, one
`year before the expiration of Gilead’s patents. In return, Gilead granted Teva six months of
`exclusivity as the only seller of generic Truvada and Atripla — a deal that was worth more than
`$1 billion to Teva.
`In the absence of Teva’s unlawful conduct with Gilead, generic versions of cART
`17.
`regimen drugs would have launched years earlier. Competition from TDF-based generics would
`have driven prices down to competitive levels.
`Plaintiff has sustained, and continues to sustain, injuries to its business and
`18.
`property as a result of Teva’s conduct with Gilead.
`JURISDICTION AND VENUE
`This Court has subject-matter jurisdiction over this action pursuant to 15 U.S.C. §§
`19.
`15 and 26, and 28 U.S.C. §§ 1331 and 1337, as Plaintiff asserts claims for violations of Sections 1
`and Section 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and seeks injunctive relief under Section
`4 and Section 16 of the Clayton Act, 15 U.S.C. § 15(a) and § 26. This Court has subject-matter
`jurisdiction over Plaintiff’s state law claims under 28 U.S.C. § 1367 because its state law claims
`are so related as to form part of the same case or controversy as its federal claims. Exercising
`supplemental jurisdiction over Plaintiff’s state law claims will avoid unnecessary duplication and
`multiplicity of actions and, therefore, promotes judicial economy, fairness, and convenience.
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`Venue in this District is proper pursuant to 15 U.S.C. §§ 15 and 22, 28 U.S.C.
`20.
`§§ 1391(b)-(d), and 28 U.S.C. § 1407. At all relevant times, Defendant transacted business
`within this District, carried out interstate trade and commerce in substantial part in this District,
`and/or have an agent and/or can be found in this District. Defendant sold and distributed the
`relevant drugs in a continuous and interrupted flow of interstate commerce, which included sales
`of relevant HIV cART drugs in the U.S. (including in this District). Defendant’s conduct had a
`direct, substantial, and reasonably foreseeable effect on interstate commerce in the U.S.
`(including in this District).
`This Court has personal jurisdiction over the Defendant because the Defendant
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`transacted business throughout the U.S. (including in this District); sold and distributed cART
`market drugs, including one or more of the relevant drugs, throughout the U.S. (including in this
`District); engaged in an unlawful conspiracy to restrain trade for cART market drugs, including
`one or more of the relevant drugs, that was directed at and had the intended effect of causing
`injury to persons residing in, located in, or doing business throughout the U.S. (including in this
`District); entered into agreements for the development and manufacture of cART market drugs,
`including the relevant drugs in the U.S. (including in this District); has registered agents in the
`U.S. (including in this District); may be found in the U.S. (including in this District); and is
`otherwise subject to the service of process provisions of 15 U.S.C. § 22.
`PARTIES
`Plaintiff Humana Inc. is a Delaware corporation with its principal place of
`22.
`business at 500 West Main Street, Louisville, Kentucky 40202. Humana and its subsidiaries are
`providers of healthcare related services, including insuring risk for prescription drug costs for
`more than 8 million members in all 50 States, the District of Columbia, and Puerto Rico. More
`than 75% of Humana’s total premium revenues in the year 2012 were derived from contracts with
`the federal government, including Medicare Part D prescription drug coverage and Medicare
`Advantage plans. Humana operates its insurance businesses through a variety of health plans and
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`other subsidiaries, all of which have assigned their relevant claims in this action to Humana.2 As
`a part D sponsor, Humana is obligated to recoup overcharges for prescription drugs.
`Humana is also authorized to bring claims for purchases it makes on behalf of
`23.
`services it offers to other health plans. More specifically, Humana offers “Administrative
`Services Only” (“ASO”) services to self-funded health plans across the United States. Under
`these ASO agreements, Humana’s subsidiaries serve as a third-party administrator to self-funded
`health plans for purposes of claims processing and other services.
`At all times relevant to this Complaint, when any of Humana’s members filled a
`24.
`prescription of HIV drugs at a third-party pharmacy, Humana — through its various health plans
`— has paid a large share of the cost of those drugs. For instance, over the relevant time period,
`Humana paid billions of dollars to third-party pharmacies for HIV drugs dispensed to its members
`in all 50 States, as well as the District of Columbia and Puerto Rico.
`In addition to the expenditures associated with its health plans, Humana has spent
`25.
`millions of dollars on HIV cART drugs that were dispensed through Humana’s own mail-order
`pharmacy and retail pharmacy locations, Humana Pharmacy, Inc. (“HPI”). HPI buys prescription
`drugs from manufacturers and wholesalers and dispenses them to Humana’s benefits plan
`members and patients who are members of non-Humana health plans through its mail-order and
`retail pharmacy businesses.
`
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`2 Some of the subsidiaries, health plan and otherwise, through which Humana conducts insurance
`business and incurs expenses related to HIV cART drugs include the following entities: Arcadian
`Health Plan, Inc., CarePlus Health Plans, Inc., PHP Companies, Inc., Cariten Health Plan Inc.,
`CHA HMO, Inc., CompBenefits Insurance Company, Emphesys Insurance Company, Health
`Value Management, Inc. d/b/a ChoiceCare Network, Humana Benefit Plan of Texas, Inc.,
`Humana Benefit Plan of Illinois, Inc., Humana Employers Health Plan of Georgia, Inc., Humana
`Health Benefit Plan of Louisiana, Inc., Humana Health Company of New York, Inc., Humana
`Health Insurance Company of Florida, Inc., Humana Health Plan of California, Inc., Humana
`Health Plan of Ohio, Inc., Humana Health Plan of Texas, Inc., Humana Health Plan, Inc.,
`Humana Insurance Company, Humana Insurance Company of Kentucky, Humana Insurance
`Company of New York, Humana Medical Plan of Michigan, Inc., Humana Medical Plan of
`Pennsylvania, Inc., Humana Medical Plan of Utah, Inc., Humana Medical Plan, Inc., Humana
`Pharmacy, Inc., Humana Regional Health Plan, Inc., Humana Wisconsin Health Organization
`Insurance Corporation, Humana Health Plans of Puerto Rico, Inc., Humana Insurance of Puerto
`Rico, Inc., and HumanaDental Insurance Company, and PHP Companies, Inc. These entities
`have assigned their relevant claims in this action to Humana Inc.
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`Defendant Teva Pharmaceuticals USA, Inc. is a Delaware corporation with a
`26.
`principal place of business at 400 Interpace Parkway #3, Parsippany, New Jersey 07054.
`CO-CONSPIRATORS
`Gilead Sciences, Inc. is a Delaware corporation with a principal place of business
`27.
`at 333 Lakeside Drive, Foster City, California 94404.
`Gilead Holdings, LLC is a Delaware limited liability company with a principal
`28.
`place of business at 333 Lakeside Drive, Foster City, California 94404. Gilead Holdings, LLC is
`a wholly-owned subsidiary of Gilead Sciences, Inc.
`Gilead Sciences, LLC (f/k/a Bristol-Myers Squibb & Gilead Sciences, LLC) is a
`29.
`Delaware limited liability company with a principal place of business at 333 Lakeside Drive,
`Foster City, California 94404. Gilead Sciences, LLC is now a wholly owned subsidiary of Gilead
`Sciences, Inc.
`Gilead Sciences Ireland UC (f/k/a Gilead Sciences Limited) is an Irish unlimited
`30.
`liability company with a principal place of business at IDA Business & Technology Park,
`Carrigtohill, Co. Cork, Ireland. Gilead Sciences Ireland UC is a wholly-owned subsidiary of
`Gilead Sciences, Inc.
`
`REGULATORY BACKGROUND
`
`A.
`
`The Regulatory Structure for Approval of Generic Drugs and the
`Substitution of Generic Drugs for Brand Name Drugs.
`
`Under the Federal Food, Drug, and Cosmetic Act (“FDCA”), manufacturers
`31.
`seeking to market a pharmaceutical product must obtain FDA approval by filing a New Drug
`Application (“NDA”). 21 U.S.C. §§ 301-392. An NDA must include specific data concerning
`the safety and effectiveness of the drug, as well as any information on applicable patents. 21
`U.S.C. § 355(a), (b). The products based on these NDAs are generally referred to as “brand-name
`drugs” or “branded drugs.”
`32. When the FDA approves an NDA, the drug product is listed in an FDA publication
`entitled Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known
`as the “Orange Book.” The FDA lists in the Orange Book any patents which, according to the
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`information supplied to the FDA by the brand manufacturer: (1) claim the approved drug or its
`approved uses; and (2) the manufacturer believes could reasonably be asserted against another
`manufacturer that makes, uses, or sells a generic version of the brand drug. 21 U.S.C.
`§ 355(b)(1). A manufacturer must submit this patent information within thirty days of NDA
`approval, or, for any later-issued patent, within thirty days of issuance of the patent. 21 U.S.C.
`§ 355(c)(2).
`The FDA relies completely on a brand manufacturer’s truthfulness and
`33.
`representations in submitting patents to be listed, as it does not have the resources or authority to
`verify the validity or relevance of the manufacturer’s patents. Therefore, in listing patents in the
`Orange Book, the FDA merely performs a ministerial act.
`A drug that receives NDA approval may be entitled to regulatory exclusivity for a
`34.
`limited period of time — in other words, the FDA cannot approve any generic drug applications
`during this period.
`The Hatch-Waxman Amendments.
`B.
`35. When a branded drug’s regulatory exclusivity is about to expire, a manufacturer
`seeking approval to sell a generic version of a branded drug may file an Abbreviated New Drug
`Application (“ANDA”) that demonstrates that a generic version of the drug is essentially the
`same as the branded version: i.e., has the same active ingredients, dosage form, safety, strength,
`absorption, route of administration, quality, performance characteristics, and intended use. The
`Hatch-Waxman Amendments, enacted in 1984, simplified the regulatory hurdles for prospective
`generic manufacturers by eliminating the need for them to file lengthy and costly NDAs. See
`Drug Price Competition and Patent Term Restoration Act, Pub. L. No. 98-417, 98 Stat. 1585
`(1984).
`An ANDA relies on the scientific findings of safety and effectiveness included in a
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`brand manufacturer’s original NDA and must further show that the generic drug is
`pharmaceutically equivalent and bioequivalent (together, “therapeutically equivalent”) to the
`brand drug. The FDA assigns an “AB” rating to a generic drug that is therapeutically equivalent
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`Case 3:21-cv-09620 Document 1 Filed 12/13/21 Page 12 of 69
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`to a brand-name counterpart, indicating the drugs may be substituted for one another. 21 U.S.C.
`§ 355(j)(8)(B).
`Congress had two goals in enacting the Hatch-Waxman Amendments. First, it
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`sought to expedite the entry of legitimate (non-infringing) generic competitors, thereby reducing
`healthcare expenses nationwide. Second, it sought to protect pharmaceutical manufacturers’
`incentives to create new and innovative products.
`To incentivize the development of new drugs, the Hatch-Waxman Amendments
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`created a 5-year period of new chemical entity (“NCE”) exclusivity. Following the approval of
`an NDA for a drug that has not been approved in any other application, no ANDA may be
`submitted for that drug for 5 years (or 4 years if the ANDA contains a paragraph IV certification,
`as discussed in the next section). See 21 U.S.C. § 355(j)(5)(F)(ii).
`The Hatch-Waxman Amendments achieved both goals, advancing substantially the
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`rate of generic product launches, and ushering in an era of historic high profit margins for brand
`manufacturers. In 1983, before the Hatch-Waxman Amendments, only 35% of the top-selling
`drugs with expired patents had generic alternatives; by 1998, nearly all did. In 1984, prescription
`drug revenue for branded and generic drugs totaled $21.6 billion; by 2009 total prescription drug
`revenue had soared to $300 billion.
`Paragraph IV Certifications.
`C.
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`To obtain FDA approval of an ANDA, a generic manufacturer must certify that the
`generic drug will not infringe any valid patents listed in the Orange Book. A generic
`manufacturer’s ANDA must contain one of four certifications:
`that no patent for the brand drug has been filed with the FDA;
`i.
`ii.
`that the patent for the brand drug has expired;
`iii.
`that the patent for the brand drug will expire on a particular date and the
`generic manufacturer does not seek to market its generic product before
`that date; or
`that the patent for the brand drug is invalid or will not be infringed by the
`generic manufacturer’s proposed product (a “paragraph IV certification”).
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`iv.
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`COMPLAINT AND DEMAND FOR JURY TRIAL
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`Case 3:21-cv-09620 Document 1 Filed 12/13/21 Page 13 of 69
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`If a generic manufacturer files a paragraph IV certification, a brand manufacturer
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`can delay FDA approval of the ANDA by suing the ANDA applicant for patent infringement. If
`the brand manufacturer sues the generic filer within forty-five days of receiving notification of
`the paragraph IV certification, the FDA will not grant final approval to the ANDA until the earlier
`of (a) the passage of 30 months, or (b) the issuance of a decision by a court that the patent is
`invalid or not infringed by the generic manufacturer’s ANDA. Before then, the FDA may grant
`only a “tentative approval” to an ANDA if it determines that the ANDA would otherwise be
`ready for final approval.
`As an incentive to spur generic alternatives to branded drugs, the first generic
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`manufacturer to file an ANDA containing a paragraph IV certification typically gets 180 days of
`market exclusivity (unless a forfeiture event occurs, as discussed below). This means that the
`first approved generic is the only available generic for at least six months, which effectively
`creates a duopoly between the brand company and the first-filing generic during this period. This
`180-day exclusivity period is extremely valuable to generic companies. When there is only one
`generic on the market, the generic price is lower than the branded price, but much higher than the
`price after multiple generic competitors enter the market.
`Generics are usually at least 25% less expensive than their brand name
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`counterparts when there is a single generic competitor, but this discount typically increases to
`50% to 80% (or more) when there are multiple generic competitors on the market. In a 2019
`report, the FDA stated that products with a single generic producer yield a generic average
`manufacturer price that is 39% lower than the brand before generic competition; with two
`competitors, generic prices are 54% lower than the brand before generic competition; and with
`four competitors, generic prices are 79% less than the brand before generic competition.3 Being
`able to sell at the higher duopoly price for six months may be worth hundreds of millions of
`dollars.
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`3 U.S. Food & Drug Administration, Generic Competition and Drug Prices: New Evidence
`Linking Greater Generic Competition and Lower Generic Drug Prices, at 2-3 (Dec. 2019),
`https://www.fda.gov/media/133509/download.
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`COMPLAINT AND DEMAND FOR JURY TRIAL
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`Case 3:21-cv-09620 Document 1 Filed 12/13/21 Page 14 of 69
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`Brand manufacturers can “game the system” by listing patents in the Orange Book
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`(even if such patents are not eligible for listing) and suing any generic competitor that files an
`ANDA with a paragraph IV certification (even if the generic competitor’s product does not
`actually infringe the listed patents) in order to delay final FDA approval of an ANDA for up to 30
`months. That brand manufacturers sue generic manufacturers under Hatch-Waxman simply to
`delay generic competition — as opposed to enforcing a valid patent that is actually infringed by
`the generic — is demonstrated by the fact that generic manufacturers prevail 73% of the time by
`either obtaining a favorable judgment or the brand manufacturer’s voluntary dismissal.
`The first generic applicant can help the brand manufacturer “game the system” by
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`delaying not only its own market entry but also the market entry of all other generic
`manufacturers. By agreeing not to begin marketing its generic drug, the first generic applicant
`delays the start of the 180-day period of generic market exclusivity. This tactic is called
`exclusivity “parking.” It creates a bottleneck because later generic applicants cannot launch until
`the first generic applicant’s 180-day exclusivity has elapsed or is forfeited.
`On December 8, 2003, Congress enacted the Medicare Prescription Drug,
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`Improvement, and Modernization Act of 2003 (“MMA”) in order to make it more difficult for
`brand and generic manufacturers to conspire to delay the start of the first filer’s 180-day period of
`generic market exclusivity. Specifically, the law now prov