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Class action alleges pharma company’s patent infringement lawsuit a ‘sham’

By Jessica Karmasek | Jun 25, 2015


BOSTON (Legal Newsline) - A class action lawsuit filed in federal court this week alleges that a patent infringement lawsuit filed by multinational pharmaceutical company Novartis against generic maker Sun Pharma simply was a delay tactic.

The United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund, or UFCW, and the Laborers Health and Welfare Trust Fund for Northern California filed the lawsuit on behalf of a class of all purchasers of Novartis’ Gleevec drug in the U.S. District Court for the District of Massachusetts Monday.

The employee welfare benefit plans, according to their filing, have paid some or all of the price of 100 mg and 400 mg Gleevec tablets on behalf of their plan participants.

Both argue they will pay more for the drug -- used in treating patients diagnosed with chronic myeloid leukemia, a cancer of the blood and bone marrow -- than they would have absent Novartis’ “unlawful scheme” to prevent and delay its generic entry.

Gleevec, which costs about $9,000 a month, was expected to go generic effective July 5.

The Food and Drug Administration already has cleared two generic applications, but Novartis has barred Sun Pharma from releasing its generic version of Gleevec for at least an additional seven months by way of a “sham” patent infringement lawsuit.

According to the 82-page proposed class action, Novartis unlawfully listed invalid follow-on patents in the FDA’s Orange Book.

The publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” commonly known as the Orange Book, identifies drug products approved on the basis of safety and effectiveness by the FDA under the Federal Food Drug and Cosmetic Act.

In particular, at issue is Novartis’ U.S. Patent No. 6,894,051. The ‘051 patent, which expires in November 2019, is among those alleged invalid follow-on patents.

The class action contends that the U.S. Patent and Trademark Office mistakenly issued the patent.

“But in the stark light of patent litigation alleging infringement of the ’051, Novartis knew that if a court were to eventually rule on the validity issue after deliberative proceedings, the ’051 patent would be held invalid,” the class action alleges.

Sun Pharma, in June 2013, sued Novartis in the U.S. District Court for the District of New Jersey, seeking a declaratory judgment that Sun Pharma was not infringing the ‘051 patent and/or that the ‘051 patent was invalid or otherwise unenforceable.

A month later, Novartis filed counterclaims against Sun Pharma, alleging infringement of the ‘051 patent and also seeking a declaration that the ‘051 patent was valid and enforceable.

“Novartis had enormous incentives to settle the patent infringement litigation and avoid competition,” the class action alleges. “By 2013, Gleevec was a roughly $2 billion drug. Losing a substantial portion of that revenue stream -- as Novartis would have if the patents were held by a court to be invalid, unenforceable, or not infringed -- would have drastically affected Novartis’ profits in 2013 and subsequent years.”

Last year -- less than a year into the underlying litigation -- Novartis and Sun Pharma agreed to settle the patent lawsuit.

The terms were not revealed, except that both parties announced that under their agreement Sun Pharma would be permitted to launch its generic version of Gleevec as of Feb. 1, 2016.

The class action contends that if Novartis had never “brandished” the ‘051 patent against Sun Pharma, there never would have been the need for the litigation between the two companies, there never would have been a settlement between them and there never would have been the agreement to delay the generic’s entry.

“Novartis should rightly enjoy exclusivity for Gleevec through the expiry of the original compound patent in early July 2015 (having grossed over $13.5 billion in U.S. sales over the years from the drug, which now yields about $2 billion per year),” the class action states.

“But patent gamesmanship and frivolous litigation undertaken solely for the purpose of extracting settlements that delay generic entry violate basic principles of antitrust law, and should be enjoined.”

UFCW and Laborers, in their class action, are seeking a permanent injunction to allow generic competition.

“If Novartis played by the rules, a generic version of Gleevec would be available for cancer patients this July, but Novartis wants to illegally reap benefits from its sham of a patent infringement suit,” Thomas M. Sobol, a partner at Hagens Berman Sobol Shapiro LLP. The consumer rights class action law firm is among those firms representing the proposed class of plaintiffs.

The firm notes that the lawsuit marks the first time purchasers of prescription drugs have sought injunctive relief to try to prevent antitrust overcharges or damages stemming from delayed launch of generic drugs.

Novartis, in a company statement, said it believes the claims are “unsubstantiated.”

“The patents covering Gleevec remain legally in force and are covered by a statutory presumption of validity,” it said. “The patents are clearly directed to our marketed product and are properly listed in the FDA’s Orange Book and the settlement with Sun Pharma is a lawful settlement agreement resolving the declaratory judgement action filed by Sun Pharma challenging the validity of one of the Gleevec patents.

“We will vigorously defend our patent rights and litigate these improper allegations.”

Pointing to the settlement with Sun Pharma last year, Novartis said patents are “vital” to the ability of companies such as itself to invest in high-risk research to advance breakthrough treatments for patients without treatment options.

“This settlement validates the Novartis patents while allowing Sun Pharma’s subsidiary to enter the market with its generic product,” the company said.

District Judge Allison Burroughs is presiding over the case.

From Legal Newsline: Reach Jessica Karmasek by email at

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