Allergan and Novartis Settle Restasis Antitrust Suit

Allergan Inc. and Novartis AG recently reached a settlement resolving claims in New Jersey federal court that Allergan engaged in a scheme to block Shire US Inc. (which Novartis later acquired) from competing with Allergan’s blockbuster drug Restasis in the market for dry-eye drugs.  The deal’s terms were not made public as part of the June 19th filing disclosing the settlement.

Shire’s complaint alleged that Allergan offered exclusive dealing provisions, coercive rebates, and bundled discounts to providers of Medicare Part D plans to incentivize them to deny or limit coverage for Shire’s competing dry-eye drug, Xiidra.  This scheme, Shire alleged, prevented it from getting Xiidra offered through any major Part D plans, while at the same time allowing Allergan to maintain its monopoly in the Part D market.

Allergan also faces other lawsuits involving Restasis, including a class action by direct purchasers that is currently seeking approval of a $51.2 million settlement and a parallel suit by insurers and other “end payers” that is moving forward as a certified class after a ruling last month.

Faruqi and Faruqi, LLP is one of the firms representing the direct purchaser plaintiffs.