Retailers Sue Don’t Cry for Me Allergan Over Dry-Eye-Drug Restasis

Major retailers, including Walgreen Co., Albertsons Cos., HEB Grocery Co., and Kroger Co., recently filed a complaint against Allergan Inc., claiming that it violated the antitrust laws to delay competition from generic versions of Allergan’s blockbuster Restasis dry-eye medication.  These retailers join the multidistrict litigation challenging Allergan’s anticompetitive Restasis conduct already underway, in which Faruqi & Faruqi, LLP has been representing a class of wholesalers and other Restasis direct purchasers seeking recovery of Allergan’s unlawful Restasis overcharges. (In re: Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litig., 18-MD-2819 (E.D.N.Y. 2018)).

The retailers, in a complaint following the direct purchaser class complaint, allege that Allergan orchestrated a multi-prong scheme to delay the market entry of less expensive generics to keep Restasis’ price high.  First, the retailers allege that Allergan: committed fraud on the U.S. Patent and Trademark Office (PTO) by lying about clinical test data to get prolonged patent protection on Restasis; wrongfully listed those fraudulently obtained-patents in the FDA’s “Orange Book” as covering Restasis; and then instituted baseless patent infringement litigation against the generic manufacturers.

Second, Allergan submitted a series of baseless petitions to the FDA asking it not to approve generic versions of Restasis until the generic competitors invested time and money satisfying unnecessary conditions that are not typically imposed on generic manufacturers.

Finally, in what has widely been considered an audacious move, Allergan “transferred” its Restasis patents to the Saint Regis Mohawk Tribe in what the DOJ has described as an attempt to “rent” the Tribe’s sovereign immunity to completely derail the newly-created inter partes review process Congress instituted precisely to expeditiously remove improperly obtained patents.

But don’t cry for Allergan. By the time generic manufacturers should have been able to come to market with their generic Restasis products, Allergan had already made several billions of dollars on Restasis sales prior to implementing its competition delay scheme.  Actions such as Allergan’s make it difficult for generic drug companies to enter the market, and thereby keep brand drug prices high, resulting in tears aplenty for retailers, direct purchasers, and consumers alike.