CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 1 of 154
`
`STATE OF MINNESOTA (cid:9)
`
`COUNTY OF DAKOTA (cid:9)
`
`DISTRICT COURT
`
`FIRST JUDICIAL DISTRICT
`Case Type: Antitrust
`
`BCBS1VI, INC., HEALTH CARE SERVICE
`CORPORATION, MOLINA
`HEALTHCARE, 1NC., AND BLUE CROSS
`AND BLUESHIELD OF FLORIDA, INC.:
`
`Court File No.
`
`Plaintiffs, (cid:9)
`
`SUMMONS
`
`VS.
`
`CELGENE CORPORATION AND
`BRISTOL-MYERS SQUIBB
`CORPORATION,
`
`Defendants.
`
`THE STATE OF MINNESOTA TO THE DEFENDANTS ABOVE NAMED:
`
`YOU ARE BEING SUED. The Plaintiffs has started a lawsuit against you. The
`1.
`Plaintiffs Complaint against you is attached to this Summons. Do not throw these papers Away.
`They are official papers that affect your rights. You must respond to this lawsuit even though it
`may not yet be filed with the Court and there may be no Court file number on this Summons.
`
`2.
`YOU MUST REPLY WITHIN 20 DAYS TO PROTECT YOUR RIGHTS.
`You must give, mail or fax to the person who signed this Summons a written response called an
`Answer within 20 days of the date on which you received this Summons. You must send a copy
`of your Answer to the person who signed this Summons located at Bennerotte and Associates,
`P.A., 3085 Justice Way, Suite 200, Eagan, Minnesota, 55121. Facsimile Number: 651-288-0860.
`
`YOU MUST RESPOND TO EACH CLAIM. The Answer is your written
`3.
`response to the Plaintiffs Complaint. In your Answer you must state whether you agree or disagree
`with each paragraph of the Complaint. If you believe the Plaintiffs should not be given everything
`asked for in the Complaint, you must say so in your Answer.
`
`YOU WILL LOSE YOUR CASE IF YOU DO NOT SEND A WRITTEN
`4.
`RESPONSE TO THE COMPLAINT TO THE PERSON WHO SIGNED THIS SUMMONS.
`If you do not Answer within 20 days, you will lose this case. You will not get to tell your side of
`the story, and the Court may decide against you and award the Plaintiffs everything asked for in
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 2 of 154
`
`the Complaint. If you do not want to contest the claims stated in the Complaint, you do not need
`to respond. A Default Judgment can then be entered against you for the relief requested in the
`Complaint.
`
`LEGAL ASSISTANCE. You may wish to get legal help from a lawyer. If you
`5.
`do not have a lawyer, the Court Administrator may have information about places where you can
`get legal assistance. Even if you cannot get legal help, you must still provide a written Answer
`to protect your rights or you may lose the case.
`
`ALTERNATIVE DISPUTE RESOLUTION. The parties may agree to or be
`6.
`ordered to participate in an alternative dispute resolution process under Rule 114 of the Minnesota
`General Rules of Practice. You must still send your written response to the Complaint even if you
`expect to use alternative means of resolving this dispute.
`
`2
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 3 of 154
`
`. Date: August 28, 2020
`
`BENNEROTTE & ASSOCIATES, P.A.
`
`By: s/ Thomas R.Bennerotte
`Thomas R. Bennerotte (#0299480)
`Vincent J. Moccio (#0184640)
`3065 Justice Way
`Suite 200 (cid:9)
`•
`Eagan, MN 55121
`651-587-8423.
`vincent@bennrotte.com
`tom@bennerotte.com
`
`LOWEY DANNENBERG, P.C.
`
`Peter D. St. Phillip (pro hac vice
`forthcoming)
`Noelle Ruggiero (pro hac vice forthcoming)
`Uriel Rabinowitz (pro hac vice forthcoming)
`Thomas Griffith (pro hac vice forthcoming)
`44 South Broadway
`Suite 1100
`White Plains, New York 10601
`914-997-0500
`PS tPhi Ili p®lowey.com
`NRuggieroelowey.com
`URabinowitz@lowey.com
`TGriffithelowey.com
`
`SCHNEIDER WALLACE COTTRELL
`KONECKY LLP
`
`Todd M. Schneider (pro hac vice
`forthcoming)
`Jason H. Kim (pro hac vice forthcoming)
`Matthew S. Weiler (pro hac vice
`forthcoming)
`2000 Powell Street
`Suite 1400
`Emeryville, CA 94608
`(415) 421-7100
`TSchneider@schneiderwallace.com
`JKim®schneiderwallace.com
`MWeiler@schneiderwallace.com
`
`3
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 4 of 154
`
`STATE OF MINNESOTA (cid:9)
`
`COUNTY OF DAKOTA (cid:9)
`
`DISTRICT COURT
`
`FIRST JUDICIAL DISTRICT
`
`CASE TYPE: ANTITRUST
`
`BCBSM, INC., HEALTH CARE SERVICE
`CORPORATION, MOLINA HEALTHCARE, INC.,
`AND BLUE CROSS AND BLUE SHIELD OF
`FLORIDA, INC.,
`
`Civil Action No.:
`
`COMPLAINT
`
`Plaintiffs,
`
`V.
`
`JURY TRIAL DEMANDED
`
`CELGENE CORPORATION AND BRISTOL-MYERS
`SQUIBB CORPORATION,
`
`• Defendants.
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 5 of 154
`
`TABLE OF CONTENTS
`
`I. (cid:9)
`
`II. (cid:9)
`
`NATURE OF THE CASE (cid:9)
`
`JURISDICTION AND VENUE (cid:9)
`
`III. (cid:9)
`
`PARTIES
`
`IV. (cid:9)
`
`ECONOMIC BACKGROUND (cid:9)
`
`V. (cid:9)
`
`THE REGULATORY BACKGROUND (cid:9)
`
`The Hatch-Waxman Act and NDA Approval Process (cid:9)
`
`The Hatch-Waxman Act and ANDA Approval Process (cid:9)
`
`The Hatch-Waxman's Balancing Act (cid:9)
`
`FDA can impose REMS (cid:9)
`
`Brand Manufacturers Have Abused REMS to Block Generic Competition (cid:9)
`
`1
`
`6
`
`7
`
`8
`
`10
`
`10
`
` 11
`
`13
`
`16
`
` 17
`
`a.
`
`b.
`
`c.
`
`d.
`
`e.
`
`f.
`
`g.
`
`h.
`
`i.
`
`State and Federal Governments Recognize the Anticompetitive Harm of REMS
`Abuse and Have Targeted REMS Abuse (cid:9)
`17
`
`Citizen Petitions (cid:9)
`
`Patent Prosecution (cid:9)
`
`Labeling Regulations Governing Marketing and Promotion of Drugs (cid:9)
`
`VI. (cid:9)
`
`CELGENE'S REGULATORY HISTORY WITH THALOMID AND REVLIMID (cid:9)
`
`VII. CELGENE'S ANTICOMPETITIVE SCHEME ILLEGALLY MONOPOLIZED THE
`MARKET FOR THALOMID AND REVLIMID (cid:9)
`
`a. (cid:9)
`
`Celgene Unlawfully Manipulated FDA's REMS Program as a Pretextual
`Justification to Refuse Samples Needed to Prosecute ANDAs to Would-Be
`Competitors (cid:9)
`
`i. (cid:9)
`
`ii.
`
`Celgene's REMS Programs for Thalomid and Revlimid (cid:9)
`
`. Celgene's REMS Programs are Post-Marketing Distribution Systems with
`No Legal or Practical Relation to Sales of Samples to Competitors (cid:9)
`37
`
`Celgene Unlawfully Refused to Sell Samples to Would-Be Competitors 38
`
`21
`
`23
`
`24
`
`26
`
`34
`
`34
`
`35
`
`(cid:9)
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 6 of 154
`
`1. (cid:9)
`
`Celgene Refused to Sell Samples to Mylan (cid:9)
`
`38
`
`a. (cid:9)
`
`MyIan's Strong Safety Protocols Confirm and Illustrate the
`Pretextual and Unlawful Nature of Its Refusal to Sell
`Samples to Would-Be Competitors (cid:9)
`
`48
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`7.
`
`Celgene Refused to Sell Samples to Exela (cid:9)
`
`Celgene Refused to Sell Samples to Lannett (cid:9)
`
`Celgene Refused to Sell Samples to Dr. Reddy's (cid:9)
`
`Celgene Refused to Sell Samples to Teva (cid:9)
`
`Celgene Refused to Sell Samples to Watson (cid:9)
`
`Celgene Refused to Sell Samples to Sandoz (cid:9)
`
`49
`
`50
`
`54
`
`55
`
`56
`
`57
`
`iv. (cid:9)
`
`Celgene Had No Legitimate Business Justification for Refusing Samples
`to Would-Be Competitors as Its Safety Concerns Were Pretextual (cid:9)
`57
`
`b.
`
`c.
`
`Celgene Induced Pharmacies and Ingredient Suppliers into Anticompetitive
`Exclusive Contracts to Prevent Generic Manufacturers from Accessing API (cid:9)
`
`59
`
`Celgene Fraudulently Obtained Patents for Thalomid and Revlimid and its Safety
`Distribution Protocols (cid:9)
`62
`
`i. (cid:9)
`
`Celgene Failed to Disclose Material Information on
`Patentability of the Drug Composition Patents (cid:9)
`
`1. (cid:9)
`
`Celgene Tried to Extend its Monopoly by Filing
`Redundant Drug Composition Patents Based on
`Previously III-Gotten Patents (cid:9)
`
`Celgene Failed to Disclose Material Information on
`Patentability of The Distribution Method Patents (cid:9)
`
`1.
`
`The Clorazil Patient Monitoring Service ("the CPMS") (cid:9)
`
`63
`
`64
`
`66
`
`70
`
`2.
`
`Honigfeld, "Effects of the Clozapine National Registry System on
`Incidence of Deaths Related to Agranulocytosis," Psychiatric
`Services, 47(1):52-56
`(1996) ("Honigfeld I") (cid:9)
`
`.71
`
`II
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 7 of 154
`
`3.
`
`4.
`
`5.
`
`6.
`
`7.
`
`8.
`
`9.
`
`Honigfeld, et al., "Reducing Clozapine-Related
`Morbidity and Mortality: 5 Years of Experience
`With the Clozaril National Registry," J. Clin. Psychiatry
`59 (suppl 3): 3-7 (1998) ("Honigfeld II") (cid:9)
`
`71
`
`The "Guide to the Clozaril Patient Monitoring Service," Novartis
`72
`Pharmaceuticals UK Ltd. (Nov. 1997) ("the Guide") (cid:9)
`
`The ACCUTANE® Pregnancy Prevention Program ("the PPP") 72
`
`The Accutane PPP Package, a 1994 patent and prescriber
`information package for Accutane, distributed by
`Roche Pharmaceuticals ("the PPP Package") (cid:9)
`
`73
`
`A Centers for Disease Control public meeting
`entitled "Preventing Birth Defects Due to Thalidomide Exposure"
`and transcript from March 26, 1997
`("the CDC Meeting" and "the CDC Transcript") (cid:9)
`
`73
`
`Zeldis, etal., "S.T.E.P.S.TM: A Comprehensive Program
`for Controlling and Monitoring Access to Thalidomide," Clinical
`Therapeutics 21(2): 319-30 (1999) ("Zeldis") (cid:9)
`74
`
`The September 4 and 5, 1997 Center for Drug
`Evaluation and Research of the Food and Drug Administration
`public meeting ("the CDER Meeting" and "the CDER Transcript")
`75
`
`10.
`
`The September 9 and 10, 1997 public, workshop held
`by the National Institutes of Health, FDA, and CDC, entitled
`"Thalidomide: Potential Benefits and Risks,
`Open Public Scientific Workshop" ("the NIH Meeting" and "the
`NIH Transcript") (cid:9)
`76
`
`11.
`
`The Distribution Method Patents are Unenforceable (cid:9)
`
`78
`
`12. Celgene Tried to Extend Its Monopoly by Filing
`Redundant Distribution Method Patents Based on its Previously
`Ill-Gotten Patents (cid:9)
`
`80
`
`Celgene Attempted to Extend Its Monopoly by Filing
`Redundant Dosing Patents and Failed to Disclose Material Information on
`Patentability of the '745 Patent (cid:9)
`81
`
`d. (cid:9)
`
`Celgene Filed Baseless Citizen Petitions to Stymie Generic Approval (cid:9)
`
`82
`
`III
`
`(cid:9)
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 8 of 154
`
`e. (cid:9)
`
`Celgene Serially Commenced "Sham" Patent Litigation and Struck Confidential
`Settlement Deals with the Generic Sponsors Which Likely Included Anti-
`Competitive Reverse Payment Terms to Delay or Exclude Would-Be Competitors
`from Entering the Markets for Thalomid and Revlimid (cid:9)
`84
`
`i. (cid:9)
`
`Celgene's Sham Litigation Against Barr (cid:9)
`
`Celgene's Sham Litigation Against Lannett (cid:9)
`
`Celgene's Sham Litigation Against Natco, Arrow, and Watson (cid:9)
`
`*iv. (cid:9)
`
`Celgene's Sham Litigation Against Dr. Reddy's (cid:9)
`
`1.
`
`Polymorphic Forms and Methods of Treatment Patents (cid:9)
`
`2.
`
`3.
`
`Additional Methods of Treatment Patents (cid:9)
`
`Methods of Delivery Patents (cid:9)
`
`v. (cid:9)
`
`Celgene's Sham Litigation Against Zydus (cid:9)
`
`1.
`
`2.
`
`Polymorphic Forms and Methods of Treatment Patents (cid:9)
`
`Additional Polymorphic Form Patents (cid:9)
`
`vi. (cid:9)
`
`Celgene's Sham Litigation Against Cipla (cid:9)
`
`1.
`
`Polymorphic Forms and Methods of Treatment Patents (cid:9)
`
`2.
`
`3.
`
`Additional Polymorphic Forms Patents (cid:9)
`
`Additional Litigation (cid:9)
`
`vii. (cid:9)
`
`Celgene's Sham Litigation Against Alvogen and Lotus (cid:9)
`
`1.
`
`Polymorphic Form, Distribution Method, and Methods of
`Treatment Patents (cid:9)
`
`2.
`
`Additional Polymorphic Form Patents (cid:9)
`
`viii. Celgene's Sham Litigation Against Sun (cid:9)
`
`ix. (cid:9)
`
`Celgene's Sham Litigation Against Hetero (cid:9)
`
`1. (cid:9)
`
`Polymorphic Forms and Methods of Treatment Patents (cid:9)
`
`86
`
`88
`
`89
`
`92
`
`92
`
`93
`
`94
`
`94
`
`94
`
`95
`
`96
`
`96
`
`97
`
`97
`
`98
`
`98
`
`99
`
`100
`
` 101
`
` 101
`
`iv
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 9 of 154
`
`2. (cid:9)
`
`Additional Methods of Treatment Patents (cid:9)
`
`x. (cid:9)
`
`Celgene's Sham Litigation Against Apotex (cid:9)
`
`VIII. CELGENE INTENDED TO AND DID HARM COMPETITION (cid:9)
`
` 102
`
`102
`
`103
`
`IX. (cid:9)
`
`X. (cid:9)
`
`XI. (cid:9)
`
`CELGENE'S FORECLOSURE OF GENERIC COMPETITION FOR THALOMID
`AND REVLIMID CAUSED PLAINTIFFS TO PAY MORE THAN IT WOULD HAVE
`105
`PAID IN AN UNMANIPULATED MARKET (cid:9)
`
`CELGENE'S FORECLOSURE OF GENERIC COMPETITION FOR THALOMID
`AND REVLIMID AFFECTED INTERSTATE COMMERCE FOR THOSE DRUGS 106
`
`CELGENE MAINTAINED MONOPOLY MARKET POWER OVER THALOMID
`AND REVLIMID AND THEIR GENERIC FORMS (cid:9)
`
`XII. ANTITRUST INJURY (cid:9)
`
`XIII. CELGENE'SILLEGAL OFF-LABEL MARKETING (cid:9)
`
`106
`
`108
`
`109
`
` 111
`
` 116
`
`a.
`
`b.
`
`c.
`
`d.
`
`e.
`
`f.
`
`Celgene's Off-Label Marketing Scheme for Thalomid (cid:9)
`
`Celgene Extended the Off-Label Marketing Scheme to Revlimid (cid:9)
`
`Celgene Used Outside CME Providers and Physicians to Execute the Extended
`Off-Label Marketing Schemes (cid:9)
`119
`
`Celgene Manipulated the RevAssist Program to Further the Off-Label Marketing
`Schemes (cid:9)
`122
`
`Celgene Orchestrated the Switch of Patients from Thalomid to Revlimid (cid:9)
`
` 123
`
`Celgene Used Its Own and Third-Party Charities to Spur Off-Label Use (cid:9)
`
` 125
`
`XIV. FRAUDULENT CONCEALMENT, TOLLING, AND CELGENE'S CONTINUING
`VIOLATIONS WITH RESPECT TO OFF-LABEL MARKETING (cid:9)
`
`126
`
`XV. (cid:9) CAUSATION AND INJURY FROM THE OFF-LABEL MARKETING SCHEME (cid:9)
`
` 127
`
`XVI. CLAIMS FOR RELIEF (cid:9)
`
`FIRST CLAIM FOR RELIEF
`• Monopolization and Monopolistic Scheme under State Law (cid:9)
`
`SECOND CLAIM FOR RELIEF
`Attempted Monopolization Under State Law (cid:9)
`
`127
`
`127
`
`131
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 10 of 154
`
`THIRD CLAIM FOR RELIEF
`Unfair and Deceptive Trade Practices Under State Law (cid:9)
`
`FOURTH CLAIM FOR RELIEF
`Unjust Enrichment Under State Law (cid:9)
`
`FIFTH CLAIM FOR RELIEF
`Fraud for Off-Label Scheme (cid:9)
`
`SIXTH CLAIM FOR RELIEF
`Negligent Misrepresentation / Restatement (Second) § 552 for Off-Label Scheme (cid:9)
`
`SEVENTH CLAIM FOR RELIEF
`Unjust Enrichment for Off-Label Scheme (cid:9)
`
`XVII. PRAYER FOR RELIEF (cid:9)
`
`XVIII. JURY DEMAND (cid:9)
`
`134
`
`137
`
`138
`
`139
`
`140
`
`141
`
`142
`
`vi
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 11 of 154
`
`Plaintiffs BCBSM, Inc., et al. (collectively, "Plaintiffs"), hereby sue Defendant Celgene
`
`Corporation ("Celgene") and Defendant Bristol-Myers Squibb Company ("Bristol-Myers
`
`Squibb"). Based on personal knowledge as to facts pertaining to them, and upon information and
`
`belief as to all other matters, Plaintiffs allege as follows:
`
`I. (cid:9)
`
`NATURE OF THE CASE
`
`1.
`
`"The most reviled drug of the 20th century is, incredibly, on its way to a second
`
`act. Thalidomide, used in the late 1950s and early 1960s as a sedative and anti-nausea
`
`medication, became the ultimate symbol of pharmacopoeia gone awry. When taken by pregnant
`
`women for morning sickness, it caused missing limb parts in the fetus ... as well as organ
`
`damage and death. Fifty years after the drug's heyday, the fear it inspired haunts arguments
`
`about the safety and regulation of medications.. . That tragedy is a major reason the Food and
`
`Drug Administration has as much authority over new drugs as it does today."
`
`2.
`
`Enter Celgene, which granted new life to the failed wonder drug. In 1998, it
`
`obtained U.S. Food and Drug Administration ("FDA") approval to market Thalomid® •
`
`(thalidomide) for a leprosy complication known as erythema nodosum leprosum ("ENL"). The
`
`fact that someone was able to salvage something positive from the thalidomide nightmare was, in
`
`many respects, remarkable.
`
`3.
`
`In 2005, Celgene successfully developed a thalidomide analog, Revlimid 11)
`
`(lenalidomide), and obtained FDA approval to market it for a specific chromosomal variant of
`
`myelodysplastic syndromes ("MDS"). Celgene would go on to obtain FDA approvals for
`
`additional Revlimid indications, including for a subset of multiple myeloma ("MM") patients in
`
`Amanda Schaffer, Thalidomide 's Comeback, SLATE, Jan. 10, 2011,
`http://www.slate.com/articles/double x/doublex/20 1 :1 /01 /thal idomides comeback.html.
`
`1
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 12 of 154
`
`2006,2 and later for a subset of mantle cell lymphoma ("MCL") patients in 2013. The FDA
`
`required restricted distribution programs for Revlimid as well. Thalomid was also indicated for
`
`MM.
`
`4. (cid:9)
`
`However, unsatisfied with profits earned within the pharmaceutical legal and
`
`.regulatory framework, Celgene commenced an anticompetitive scheme to illegally monopolize
`
`the market for Thalomid and Revlimid. Celgene constructed an impenetrable monopolistic
`
`fortress and engaged in a multipronged scheme to unlawfully maintain 100% share of the market
`
`for these two drugs by successfully interfering with competitors' efforts to develop and/or obtain
`
`FDA approval for generic versions of Thalomid and/or Revlimid at each progressive step of
`
`development. As part of this anticompetitive scheme, by information and belief, Plaintiffs allege
`
`that Celgene:
`
`(1) manipulated the safety program designed to protect patients from thalidomide's and
`
`lenalidomide's teratogenic properties to prevent would-be generic competitors from
`
`obtaining samples of the active pharmaceutical ingredients (API) necessary to develop
`
`AB-rated generics; -
`
`(2) prevented pharmacies and ingredient suppliers from acting as alternative sources of
`
`samples for such would-be generic competitors;
`
`(3) fraudulently obtained various patents from the U.S. Patent and Trademark Office
`
`("USPTO") for Thalomid and Revlimid and their associated safety distribution protocols;
`
`2 Under FDA's orphan drug exclusivity program, 21 U.S.C. §§ 360aa-cc, FDA may not approve •
`a generic equivalent for a specific indication or "rare disease" that a brand drug is FDA-approved
`to treat for a period of seven (7) years. MM is such a "rare disease." Therefore, until May 25,
`2013, FDA could not approve a generic thalidomide for the treatment of MM. It could,
`nevertheless, approve generic thalidomide for the treatment of other indications. This is known
`as a "skinny label," which allows for market entry prior to the expiration of all'exclusivities
`related to a drug.
`
`2
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 13 of 154
`
`(4) filed baseless citizen petitions with FDA to stymie generic approvals; and
`
`(5) serially commenced "sham" patent infringement lawsuits.
`
`5.
`
`Furthermore, in the rare instances where Celgene's efforts failed to prevent a
`
`would-be competitor from prosecuting an Abbreviated New Drug Application ("ANDA"), and
`
`FDA approval of ANDA for a generic version of Thalomid or Revlimid became possible,
`
`Celgene entered into confidential settlements with its competitors that may have included anti-
`
`competitive "pay-for-delay" reverse payments. The federal government routinely has criticized —
`
`and challenged in court — the same sort of anticompetitive practices in which Celgene engages.'
`
`6.
`
`In the last ten years, Celgene's anticompetitive scheme has allowed it to charge
`
`supracompetitive prices for Thalomid and Revlimid. In fact, Celgene has routinely increased its
`
`price either once or twice per year. In 2006, a month's supply of Revlimid cost $6,195.4 In 2010,
`
`the price was about $8,000 for a one-month supply. Now, a twenty-eight day supply of Revlimid
`
`costs patients and their health insurers as much as $20,000, and a twenty-eight day supply of
`
`Thalomid costs them as much as $10,000. In 2016, Celgene's total revenue was $11.229 billion,
`
`of which $6.974 billion was from Revlimid and $152.1 million was from Thalomid. When
`
`Thalomid first entered the market, it cost approximately $6 per capsule. In 2014, its price soared
`
`to as much as $357 per capsule.
`
`7.
`
`Celgene never saw a decrease in demand for the two drugs since Celgene illegally
`
`blocked and continues to block all generic alternatives.
`
`3 See, e.g., Federal Trade Commission, Pay for Delay: How Drug Company Pay-Offs Cost
`Consumers Billions (Jan. 2010), https ://w ww.ftc.govis ites/defau lt/files/doc um en ts/re pons/pay-
`del ay-how-drug-company-pay-offs-cost-cons um ers-bi I I i ons- federal-trad e-com m iss i on-staff-
`study/100112payfordelayrpt.pd f.
`Katherine Streeter, How A Drugmaker Gamed The System to Keep Generic Competition Away
`(May 17, 2018), haps://www.npr.oresections/health-shots/2018/05/17/571986468/how-a-
`drugn) aker-Ramed-the-system-to-keep-generic7competition-awav
`
`3
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`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 14 of 154
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`8. (cid:9)
`
`Furthermore, beginning in 1998, Celgene embarked on a systematic campaign to
`
`aggressively promote Thalomid for "off-label" uses, that is, uses for which the drug had not -
`
`obtained regulatory approval and, in most instances, for which Celgene had not even sought such
`
`approval. Once Revlimid became commercially available in 2005, Celgene did the same for
`
`Revlimid.
`
`9.
`
`While physicians are free to prescribe drugs off-label, pursuant to their medical
`
`judgment, pharmaceutical companies are prohibited by law from promoting such uses. That did
`
`not stop Celgene.
`
`10.
`
`"Unlawful off-label drug promotion has been the subject of significant health care
`
`fraud enforcement efforts by the United States Department of Justice ("Dal"), two cities, and 28
`
`states' attorneys general using the Federal False Claims Act ("FCA")."5 Indeed, Celgene recently
`
`entered into a $315 million settlement to resolve FCA claims relating to off-label promotion of
`
`Thalomid and Revlimid. Specifically, a former sales representative for Celgene (as described
`
`below) alleged that Celgene promoted these drugs to treat cancers for which they were not
`
`indicated through the FDA approval process, causing the federal Medicare program, state
`
`Medicaid programs, and other third-party payors ("TPPs") to pay hundreds of millions worth of
`
`fraudulent prescriptions for Thalomid and Revlimid.6
`
`5 CENTERS FOR MEDICARE & MEDICAID SERVICES, Off-Label Pharmaceutical Marketing: How to
`Recognize and Report It (Oct. 2015), available at https://www.cms.gov/Medicare-Medicaid-
`Coordination/Fraud-Prevention/Medicaid-InteQritv-Education/Downloadstoff-label-marketing-
`factsheet.pdf
`
`6 U.S. DEPARTMENT OF JUSTICE, Celgene Agrees to Pay $280 Million to Resolve Fraud
`Allegations Related to Promotion of Cancer Drugs for Uses Not Approved by FDA (July 24,
`2017), available at https://www.justice.gov/usao-cdca/pr/Celgene-aerees-pav-280-million-
`resolve-fraud-alleeations-related-promotion-cancer-drugs.
`
`4
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`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 15 of 154
`
`11. (cid:9)
`
`Celgene's illicit efforts with respect to Thalomid and Revlimid have been
`
`enormously profitable. Since 2006, Celgene has recorded $35.6 billion of Revlimid sales and
`
`$3.65 billion of Thalomid sales. Witness these drugs' respective net product sales:7
`
`2016 20.15 2014 2013 2012 2011 2010 2009 2008 2007 2006
`
`Thalomid 152M 185M 221 M 245M 302M 339M 387.M 437M, 505M 447M 433M
`
`12.
`
`Fast forward to 2019: Celgene's Revlimid sales for the third quarter were $2.7
`
`billion, with its U.S. sales totaling $1.9 billion, and international sales at $868 million.8 Revlimid
`
`is now the second-highest grossing drug worldwide,9 and is projected to reach nearly $14 billion
`
`in worldwide sales by 2022.1°
`
`13. Celgene's anticompetitive tactics to block generic entry have caused Plaintiffs to
`
`pay supracompetitive prices for these drugs in violation of states' antitrust and consumer
`
`protection, trade practices, and insurance fraud laws. Plaintiffs seek civil damages they have
`
`incurred and injunctive relief.
`
`14.
`
`Furthermore, duringthe time periods addressed above, Plaintiffs spent many
`
`millions on off-label Thalomid and Revlimid, much of which was ineffective, or worse,
`
`• endangered the patients. Plaintiffs seeks civil damages it has incurred resulting from Celgene's
`
`7 Net product sales figures drawn from Celgene's Annual Reports/Form 10-K filings for fiscal
`years ending 2007-2016.
`8 BusinessWire, Celgene Reports Third Quarter 2019 Operating and Financial Results, (Oct. 31,
`2019), htt ps://w ww.businessw ire.com/news/home/20191031005259/en/Cel gene-Reports-
`uarter-2019-Operati n g-F i nancia 1-Res u lts.
`9 Amy Brown, EP Vantage 2017 Preview (Dec. 2016), http://info.evaluategroup.com/rs/607-
`YGS-364/images/EPV2017Prev.pdf.
`I° Evaluate Ltd., EvaluatePharma Orphan Drug Report 2017 (Feb. 2017),
`http://info.evaluategroup.com/rs/607-YGS-364/images/EPOD17.pdf. Not surprisingly, Revlimid
`was the top-selling "orphan drug" in the United States in 2016. Id. "An orphan drug is a
`pharmaceutical product aimed at rare diseases or disorders." Id.
`
`5
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`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 16 of 154
`
`years-long practice of surreptitiously marketing Thalomid and Revlimid for uses for which they
`
`were neither approved by the FDA nor medically efficacious.
`
`15. Celgene's unlawful scheme to market Thalomid and Revlimid for off-label uses
`
`for which it is ineffective and unacceptably dangerous was and continues to be in violation of a
`
`variety of state laws, including the laws of the Minnesota, as set forth below.
`
`II. (cid:9)
`
`JURISDICTION AND VENUE
`
`16.
`
`This action is brought under Minn. Stat. § 484.01, pursuant to Minn. Stat.
`
`§ 325D.51 et seq., to recover damages, treble damages, declaratory or injunctive relief, and the
`
`costs of suit, including reasonable attorneys' fees, for the injuries to Plaintiffs resulting from
`
`defendants' establishment, maintenance, or use of, or any attempt to establish, maintain, or use
`
`monopoly power over any part of trade or commerce, unfair discrimination and other violations
`
`of Minnesota antitrust laws and trade regulations.
`
`.17. (cid:9)
`
`Venue is proper in Dakota County pursuant to Minn. Stat. § 542.09, because the
`
`cause of action or some part thereof arose in this county.
`
`18. All defendants transact business in Dakota County.
`
`19.
`
`Plaintiff BCBSM, Inc. maintains an office in Eagan, Minnesota.
`
`20.
`
`Furthermore, Prime Therapeutics LLC and Prime Therapeutics Specialty
`
`Pharmacy LLC (collectively, "Prime") are partially-owned by Plaintiff Health Care Service
`
`Corporation ("HCSC"), domiciled and organized under the laws of Minnesota, and has its
`
`headquarters in Eagan, Minnesota. Prime is a pharmacy benefit manager ("PBM") for HCSC,
`
`BCBSM, Inc., and Blue Cross and Blue Shield of Florida, Inc. ("Florida Blue") (among other
`
`health plans), as described below. HCSC reimbursed claims for Thalomid in the amount of
`
`approximately $57,000 through pharmacies located in Dakota County and reimbursed claims for
`
`Revlimid in the amount of approximately $675,000 for members residing in Eagan, Minnesota.
`
`6
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`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 17 of 154
`
`Florida Blue reimbursed claims for Revlimid in the amount of approximately $37,000 through
`
`pharmacies located in Dakota County.
`
`III. PARTIES
`
`21.
`
`Plaintiff BCBSM, Inc.., d/b/a Blue Cross and Blue Shield of Minnesota
`
`("BCBSM") is a nonprofit health care service plan corporation organized under Minnesota
`
`Statutes chap. 62C with a principal place of business in Eagan, Minnesota. It is held by a holding
`
`company, Aware Integrated, Inc.
`
`22.
`
`Plaintiff Health Care Service Corporation ("HCSC") is organized as a Mutual
`
`Legal Reserve Company under Illinois law and is an independent licensee of the Blue Cross Blue
`
`Shield Association ("BCBSA"). It is headquartered at 300 E. Randolph Street, Chicago, IL.
`
`23.
`
`Plaintiff Blue Cross and Blue Shield of Florida, Inc. (d/b/a Florida Blue) ("Florida
`
`Blue") is a Florida corporation with its principal place of business in Jacksonville, Florida."
`
`24.
`
`Plaintiff Molina Healthcare, Inc. ("Molina") is a publicly traded healthcare
`
`management organization headquartered in Long Beach, California and incorporated under the
`
`laws of Delaware. Molina, through local licensed subsidiaries, provides managed health care
`
`services under the Medicaid and Medicare programs and through state insurance marketplaces.
`
`Through its subsidiaries, Molina services approximately 3.4 million members.
`
`25.
`
`The benefits for these health plans include prescription drug coverage under
`
`which claims for Thalomid and Revlimid have been, and continue to be, submitted and paid.
`
`26. Defendant Celgene Corporation is a drug manufacturer, incorporated in Delaware
`
`and headquartered at 86 Morris Avenue, Summit, New Jersey. Celgene manufactures and
`
`markets Thalomid and Revlimid.
`
`" This Complaint refers to the entities above defined in Ili 19-25 collectively as "Plaintiffs".
`
`7
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 18 of 154
`
`27.
`
`Defendant Bristol-Myers Squibb Company wholly owns Defendant Celgene
`
`Corporation as its subsidiary and has since Bristol-Myers Squibb acquired Celgene pursuant to a
`
`January 2, 2019 Merger Agreement. Bristol-Myers Squibb is a biopharmaceutical drug company
`
`incorporated under the laws of Delaware with its principal executive offices located at 430 E.
`
`29th Street, 14 FL, New York, NY 10016. Bristol-Myers Squibb is a publicly traded corporation
`
`registered on the New York Stock Exchange under the symbol "BMY."
`
`IV. (cid:9)
`
`ECONOMIC BACKGROUND
`
`28.
`
`Due to laws that regulate marketing/selling, prescribing, and filling prescription
`
`drugs, the United States is a fertile venue ripe for illegal anticompetitive exploitation by drug
`
`manufacturers who seek to profit from product monopolies.
`
`29.
`
`For most consumer products, the person responsible for paying for them is also
`
`the person selecting them. The pharmaceutical marketplace departs from this norm.
`
`. (cid:9)
`
`30. (cid:9)
`
`Prescription drugs may only be dispensed pursuant to a doctor's prescription, and
`
`a licensed pharmacist may dispense only the brand-name drug named in the prescription or its
`
`AB-rated,12 FDA-approved generic equivalent.13
`
`31.
`
`In most instances, the patient and his health insurer pay for the prescription drug
`
`that a doctor has prescribed. Therefore, the doctor's prescription defines the relevant product
`
`market, because it limits the patients' (and pharmacist's) choice to the drug named therein.
`
`32. When there is no generic competition for a brand-name drug, the brand
`
`manufacturer can set and maintain prices without losing market share. The ability to do this is
`
`the result of the brand-name drug company's monopoly power over the market for that drug in
`
`12 FDA grants an AB-rating to generic drugs that meet necessary bioequivalence requirements.
`13 In many states, pharmacists must substitute an AB-rated generic for a brand-name drug
`without seeking permission from the prescribing doctor.
`
`8
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 1-1 Filed 09/29/20 Page 19 of 154
`
`both its brand-name and generic form. When an AB-rated generic is available, price is
`
`reintroduced to the product selection decision at the pharmacy counter, and the disconnect
`
`between choice and payment is lessened, disabling the brand manufacturer from exploiting that
`
`disconnect. Generic introduction restores normal competitive pressures.
`
`33.
`
`Typically, AB-rated generic versions of brand-name drugs are priced significantly
`
`below their brand-name counterparts. When multiple generic manufacturers enter the market,
`
`prices for generic versions of a brand-name drug predictably decrease, sometimes as much as by
`
`90%, because of price competition among generic manufacturers." FDA reports that, in 2010,
`
`the use of FDA-approved generics saved $158 billion, or $3 billion per week, and that one year
`
`after entry, a generic drug takes over 90% of the corresponding brand-name drug's sales at 15%
`
`of the price. Generic drug entry, therefore, is a huge threat to the continued profitability of a
`
`branded drug.
`
`34.
`
`As the price gap between the brand-name drug and its corresponding generic drug
`
`widens, the former's sale volume shrinks. Price is the only material difference between a brand-
`
`name drug and its AB-rated generic equivalent.
`
`• 35. (cid:9)
`
`For every rung in the prescription drug ladder, except for the brand-name drug
`
`manufacturer, there is a financial benefit to choosing the generic drug. Pharmacies normally earn
`
`a higher markup on generic drugs because of pricing structure and federal reimbursement rules
`
`" See, e.g., Jon Leibowitz, "Pay for Delay" Settlements in the Pharmaceutical Industry: How
`Congress Can Stop Anticompetitive Conduct, Protect Consumers' Wallets, and Help Pay for
`Health Care Reform (June 23, 2009),
`http://www.ftc.gov/sites/deThult/files/docunlents/DubI ic statements/pav -d elay-settl em ents-
`ah arm aceuti cal-i nd ustrv-how-con gress-can-stop-anti competi ti ve-cond uct-
`protect/090623 pavforde I ayspeech.pdf.
`
`9
`
`

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`CASE 0:20-