Union Sues Glaxo, Teva Over Lamictal Pay-For-Delay Patent Deal

October 26, 2012, by Mandour & Associates, APC

Los Angeles – GlaxoSmithKline LLC and Teva Pharmaceutical Industries Ltd. illegally conspired to delay the entry to the market of a generic version of Glaxo’s epilepsy drug Lamictal in order to preserve the validity of Glaxo’s patent for the drug and allow Teva generic exclusivity, a union healthcare fund alleged in a new class action on Thursday.

The International Brotherhood of Electrical Workers Local 595 Health and Welfare Fund is seeking in its complaint in New Jersey federal court to represent a class of all those who purchased or paid for Lamictal-brand lamotrigine tablets from Glaxo or a generic version from Teva.

Glaxo has manufactured, marketed, and sold Lamictal tablets since 1994 for the treatment of medical conditions such as epilepsy, other seizure disorders, and bipolar disorder, as well as several off-label uses. Lamictal was a highly successful and profitable drug, but Glaxo’s patent for it expired in 2008.

In 2002 Teva filed abbreviated new drug applications with the U.S. Food and Drug Administration for approval to market generic versions of Glaxo’s Lamictal tablets. Glaxo then sued Teva alleging willful infringement of the Lamictal patent.

On the final day of a bench trial in the patent case, the judge issued a ruling invalidating the independent claim of the Lamictal patent, and said a ruling on its other three dependent claims would be issued shortly.

“Faced with the likelihood that its first effort to delay entry of generic versions of Lamictal would fail, Glaxo sought another vehicle to create delay and preserve its lucrative monopoly for as long as possible,” the complaint says. “With those goals in mind, in February 2005, it entered into purported settlement negotiations with Teva.”

The two companies entered into an allegedly anticompetitive settlement that same month, according to the union fund. Glaxo offered Teva a range of financial inducements in exchange for Teva’s agreement to settle the patent litigation in a way that preserved the validity of the Lamictal patent, while delaying Teva’s launch of its generic version, the fund says.

Teva agreed to delay launching its generic version of Lamictal until as late as July 2008, the expiration date of the patent. The settlement basically ignored the fact that Teva had already prevailed in its efforts to invalidate the primary patent claim, the fund says.

In exchange for the delay, Teva received the right to sell a limited quantity of generic Lamictal tablets beginning in June 2005.

“Glaxo and Teva guaranteed themselves supra-competitive revenues for several months, which resulted in anti-competitive overcharges paid by indirect purchasers of Lamictal tablets such as plaintiff and its beneficiaries,” the complaint says.

In the absence of the agreements, Teva would have brought its generic version to the market three years earlier, either because it prevailed in the Patent Litigation or chose to launch its generics “at risk,” the fund says. Other generic manufacturers would also have entered the market earlier, causing lower prices for generic Lamictal once Teva’s 180-day exclusivity period would have expired, it says.