Letter to Congress: AbbVie and Predecessors’ Long History of Illegal Generic Delay
May 17, 2021
Dear Chairwoman Maloney and Ranking Member Comer,
We are writing in regards to the Committee’s May 18th Hearing that will include the testimony of AbbVie CEO Richard A. Gonzalez.
AbbVie along with its predecessor corporations Abbott, Forest Labs, Warner Chilcott, Allergan, and Actavis (collectively “AbbVie”) have consistently and flagrantly violated Sections 1 & 2 of the Sherman Act by illegally extending patent monopolies.
While AbbVie may be most well-known for its ongoing conduct regarding Humira, the company has a long and well-documented history of illegally denying Americans access to low-cost generic drugs. AbbVie and its predecessors’ entire business model in recent years has been to acquire older brand drugs that were about to face generic competition and then to illegally extend its monopoly on those drugs by using well-documented anticompetitive strategies including ‘pay-for-delay,’ market allocation, ‘product hopping,’ filing sham citizens petitions, fraud on the patent office, and filing sham patent litigation.
We have created the attached Table to show how AbbVie and its predecessors’ have been accused of illegally extending monopolies regarding at least eleven (11) major brand drugs in the last ten years, including several blockbusters such as Namenda, Humira, Restasis, Bystolic, and AndroGel.
Some information on the Table appears particularly relevant:
First, we estimate that AbbVie’s illegal schemes on just these eleven drugs have caused Medicare Part D to spend an additional $20 billion on AbbVie’s brand drugs instead of generic equivalents from 2012-19. This is roughly half of all Medicare Part D spending on these eleven drugs from 2012-19.
Second, this Table establishes that the Department of Justice Antitrust Division and the Federal Trade Commission have failed to enjoin, cease, or recover sufficient damages to disincentivize AbbVie from engaging in illegal conduct. This is particularly surprising in light of the fact that many of these cases, including In re Namenda Antitrust Litigation, In re Restasis Antitrust Litigation, and In re Asacol Antitrust Litigation, have already been extensively litigated and it would be relatively easy for the government to file follow-on cases.
Third, this Table establishes that private class actions, as they currently exist, do not sufficiently punish companies like AbbVie enough to deter continued illegal conduct. As shown, private claims are often spread among direct purchaser class actions, indirect purchasers class actions, and direct claims brought by major retailers. Unfortunately, private claimants often face enormous procedural barriers, especially at the class certification stage of litigation, that greatly reduce the likelihood of a substantial recovery and therefore reduces the effectiveness of private antitrust claims to deter future anticompetitive conduct.
American Economic Liberties Project