Gilead must face pay-for-delay suit
Class-action alleges pharma company blocked rival HIV drug | Health insurance trust convinces judge a reverse payment may have been made.
A California court has held that biotech firm Gilead Sciences must face a class-action lawsuit alleging that Gilead 'schemed' to prevent a generic rival from releasing a competing version of its HIV drug Truvada (tenofovir disproxil fumarate).
US District Judge Jeffrey White of the US District Court for the Northern District of California ruled on Friday, August 19 that the Jacksonville Police Officers and Fire Fighters Health Insurance Trust (JPOFFHIT)—a health insurance trust organised under the laws of the State of Florida—could proceed with its suit against Gilead.
Nearly two years ago, in September 2020, the trust filed a suit against Gilead, claiming that the biotech had provided India-based Cipla with an “unexplained payment” so it would not market a generic version of Truvada.
Cipla and Gilead had settled litigation in July 2014 and, with the exception of a licence agreement, the parties did not disclose the terms the settlement.
According to the complaint, Gilead’s “unlawful strategies to stave off competition for its HIV medication” have allowed it to continue selling Truvada at a high price. At the time of filing, the trust claimed it has been forced to spend approximately $15,000 on Truvada for the benefit of its members since the beginning of 2020.
Gilead sought to dismiss the claims, arguing that the trust had failed to state a claim and “merely speculate[d] that the Cipla litigation was settled by a reverse payment”.
However, White sided with the trust, confirming that it had sufficiently alleged the existence of a reverse payment.
"Defendants argue there is nothing unusual about the parties attempting to reach a global settlement involving multiple patents and multiple drugs and that it is equally plausible that the Cipla settlement was a routine early entry settlement," said White. "The court is not persuaded.”
Approximately two-months after Gilead and Cipla settled, Gilead publicly announced that it was licensing seven generic manufacturers, including Cipla, to sell generic versions of two of Gilead’s hepatitis C drugs in 91 developing countries.
White added: “In light of that timing and the trust’s allegations that many other companies had the capability to manufacture the active pharmaceutical ingredients, the court concludes it is reasonable to infer that Cipla obtained those rights as part of the settlement with Gilead."
According to the court, while the trust used language that would be considered "speculative in other contexts”, this was not fatal to its claim.
Representing the trust, Henry Quillen, of Whatley Kallas, told LSIPR: “We are pleased that the court agreed that we had plausibly alleged an anticompetitive agreement between Gilead and Cipla, and we look forward to proving our claims.”
The parties will have a case management conference on November 4, 2022.
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