Pfizer’s Bid to Erase Monopolization Case Fails

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By Eleanor Tyler

Pfizer Inc. won’t escape a large antitrust case alleging it conspired with Teva Pharmaceuticals USA Inc. to stifle competition for blockbuster psychiatric drug Effexor XR.

The U.S. Supreme Court Feb. 20 denied a petition by Wyeth LLC (now part of Pfizer) to review an appellate decision that revived monopolization claims by Effexor buyers, including large buyers like Rite Aid Corp. The case now returns to the U.S. District Court for the District of New Jersey for discovery.

The dispute involves what types of non-cash payments between two drug companies are evidence of illegal agreements to divide a drug market. Plaintiffs say Wyeth agreed with Teva not to launch an authorized generic of its own to compete with Teva’s version.

Wyeth, the owner of the Effexor patent, contended that it gave Teva an exclusive license, which should be shielded from consideration as an illegal “pay for delay” bargain because granting a license is a core patent right.

The question of what constitutes a “payment” from the patent holder to a generic drugmaker to delay its entry into the market is important in many pay-for-delay cases. Drug companies rarely exchange cash in patent agreements after the Supreme Court’s 2013 FTC v. Actavis decision said big cash payments can lead to antitrust lawsuits. Courts are now wrestling with which other promises and exchanges of value trigger antitrust law.

Rutgers Law Professor Michael Carrier told Bloomberg Law that the Supreme Court’s decision not to hear the case is “unsurprising and completely appropriate.”

“As courts have recognized after Actavis, the payment by which a brand company can keep a generic off the market can take many forms,” Carrier said.

Carrier, who led a group of professors in a brief supporting the plaintiffs in the Third Circuit, said that court’s decision “will play an important role going forward.”

The U.S. Court of Appeals for the Third Circuit reversed the district court’s decision that the plaintiffs didn’t present a reliable estimate of the non-cash payment’s cash value. The Third Circuit opinion, which now stands unchallenged, said the district court’s standard was too high a hurdle for plaintiffs who haven’t had a chance to collect evidence about their claims through discovery. The circuit court said the plaintiffs plausibly alleged that Wyeth made a large, unexplained payment to Teva as a matter of law.

The case has been pending since May 2011. The defendants answered the plaintiffs claims in the district court last week.

The case: Wyeth LLC v. Rite Aid Corp. , U.S., No. 17-771, cert. denied 2/20/18 .

To contact the reporter on this story: Eleanor Tyler in Washington at

To contact the editor responsible for this story: Fawn Johnson at

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