Oregon Attorney General Dan Rayfield has reached a settlement with pharmaceutical companies AbbVie and Besins in a case concerning the monopoly on testosterone replacement gels. The agreement, amounting to $9.25 million, includes $6,197,500 in disgorged profits and penalties along with attorney fees and costs.
The lawsuit alleged that AbbVie and Besins engaged in tactics to prevent competitors from producing generic versions of their products. These actions included filing lawsuits to prolong the period during which they could charge higher prices for their gels.
“These are the sneaky legal tricks that pharmaceutical companies will use to keep drug prices high for as long as they can,” Rayfield stated. “It’s unacceptable and a direct attack on people who are just trying to get by. It’s a violation of trust that should exist between consumers and the companies that provide life-changing medications.”
The companies were accused of employing "sham patent litigation," falsely asserting that other manufacturers infringed on their patents. This allowed them to accumulate significant profits while patients, insurance companies, and Medicaid faced elevated costs for the testosterone gels.
Disgorged profits refer to funds obtained through illegal or unethical practices that are returned with interest or penalties.
Oregon initiated its case following a similar Federal Trade Commission (FTC) victory resulting in a $448 million disgorgement remedy, which was later overturned by the U.S. Supreme Court due to limitations under the FTC Act regarding such remedies.
Rayfield emphasized Oregon's unique position: “We’ve seen that the federal government is scaling back a number of restrictions,” he said. “The state attorneys general have to stand up and fill the hole that is left to protect our consumers.”
Portions of the settlement will be allocated to Oregon Medicaid for overpayments on testosterone gel prices, while some funds will support the protection and education fund within the Oregon Department of Justice as well as antitrust and consumer protection divisions.
AG Rayfield expressed gratitude towards his team at Oregon DOJ led by Senior Assistant Attorney General Brian De Haan and Special Assistant Attorney General Chris Kayser for their efforts in this case.