Litigation Details for CIGNA CORPORATION v. CELGENE CORPORATION (D.N.J. 2021)

CIGNA CORPORATION v. CELGENE CORPORATION (D.N.J. 2021)

Docket		Date Filed	2021-05-24
Court	District Court, D. New Jersey	Date Terminated
Cause	15:1 Antitrust Litigation	Assigned To
Jury Demand	Plaintiff	Referred To
Parties	BRISTOL-MYERS SQUIBB COMPANY
Patents	6,045,501; 6,281,230; 6,315,720; 6,555,554; 6,561,976; 6,561,977; 6,755,784; 6,869,399; 7,119,106; 7,141,018; 7,189,740; 7,230,012; 7,465,800; 7,468,363; 7,668,730; 7,855,217; 7,959,566; 7,968,569; 8,204,763; 8,288,415; 8,315,886; 8,404,717; 8,530,498; 8,626,531; 8,648,095; 8,741,929; 9,056,120; 9,101,621; 9,101,622
Attorneys	PETER D. ST. PHILLIP , JR.
Firms	Montgomery McCracken Walker & Rhoads
Link to Docket	External link to docket

Biologic Drugs cited in CIGNA CORPORATION v. CELGENE CORPORATION

Details for CIGNA CORPORATION v. CELGENE CORPORATION (D.N.J. 2021)

Date Filed	Document No.	Description	Snippet	Link To Document
2021-05-24				External link to document
2021-05-24	1		preventing the Revlimid ‘501 Patent 6,045,501 4-Apr-00 … Patent, ‘886 Patent, ‘717 Patent, ‘498 Patent, ‘531 Patent, ‘095 Patent, ‘120 Patent, ‘621 Patent, …800 Patent, ‘217 Patent, ‘569 Patent, ‘498 Patent, ‘095 Patent, ‘621 Patent, and the ‘622 Patent.100 … ‘800 Patent, ‘217 Patent, ‘569 Patent, ‘498 Patent, ‘095 Patent, ‘621 Patent, and ‘622 Patent.101 … ‘800 Patent, ‘217 Patent, ‘569 Patent, ‘498 Patent, ‘095 Patent, ‘621 Patent, and ‘622 Patent.110 This	External link to document
2021-05-24	40	Amended Complaint	preventing the Revlimid ’501 Patent 6,045,501 4-Apr-00 … Patent, ’886 Patent, ’717 Patent, ’498 Patent, ’531 Patent, ’095 Patent, ’120 Patent, ’621 Patent,…its ’517 Patent, ’720 Patent, ’977 Patent, ’784 Patent, ’740 Patent, ’800 Patent, ’217 Patent, ’569 Patent…200 patent, ’977 Patent, ’784 Patent, ’886 Patent, ’531 Patent, ’800 Patent, ’217 Patent, ’363 Patent…’800 Patent, ’217 Patent, ’569 Patent, ’498 Patent, ’095 Patent, ’621 Patent, and ’622 Patent.182 This	External link to document

CIGNA CORPORATION v. CELGENE CORPORATION: A Comprehensive Litigation Analysis

In the complex world of pharmaceutical litigation, the case of CIGNA CORPORATION v. CELGENE CORPORATION stands out as a significant battle between a major health insurer and a pharmaceutical giant. This legal dispute, filed under case number 2:21-cv-11686 in the United States District Court for the District of New Jersey, has far-reaching implications for the pharmaceutical industry, healthcare costs, and antitrust law enforcement.

The Parties Involved

CIGNA Corporation: The Plaintiff

CIGNA Corporation, a global health services company, serves as the plaintiff in this case. As one of the largest health insurance providers in the United States, CIGNA plays a crucial role in negotiating drug prices and managing healthcare costs for millions of Americans.

Celgene Corporation: The Primary Defendant

Celgene Corporation, now a subsidiary of Bristol-Myers Squibb, is the primary defendant. Celgene is a biopharmaceutical company known for developing and marketing innovative therapies, particularly in the areas of cancer and inflammatory disorders.

Bristol-Myers Squibb: The Parent Company

Bristol-Myers Squibb, a global pharmaceutical company, is also named as a defendant due to its acquisition of Celgene in 2019. This corporate relationship adds an additional layer of complexity to the case.

The Core of the Dispute

At the heart of this litigation lies a series of allegations made by CIGNA against Celgene, primarily focusing on two key drugs: Revlimid and Thalomid. These medications, used in the treatment of multiple myeloma and other conditions, have been subject to intense scrutiny due to their high prices and Celgene's alleged anticompetitive practices.

Allegations of Anticompetitive Behavior

CIGNA's complaint outlines several alleged anticompetitive practices employed by Celgene:

1. Refusal to provide drug samples to generic manufacturers
2. Abuse of patent processes
3. Engaging in sham litigation to delay generic competition
4. Entering into anticompetitive settlement agreements with potential generic competitors

Impact on Drug Prices

The crux of CIGNA's argument is that these practices have resulted in artificially inflated prices for Revlimid and Thalomid. As a major purchaser of these drugs, CIGNA claims to have suffered significant financial harm due to these alleged anticompetitive actions.

"The thrust of the allegations made by the Insurer Plaintiffs and MSP Plaintiffs is that Celgene, a brand manufacturer of pharmaceutical products, engaged in a series of conduct over the course of multiple years to exclude generic entry into the market for a brand drug named Revlimid." [1]

Legal Framework and Claims

Antitrust Laws at Play

The case primarily revolves around alleged violations of federal and state antitrust laws. The Sherman Act, particularly Section 2, which prohibits monopolization and attempts to monopolize, forms the backbone of the federal claims.

State Law Claims

In addition to federal antitrust claims, CIGNA has asserted various state law claims, including:

• Monopolization under state laws
• Unfair and deceptive trade practices
• Unjust enrichment

Scope of Damages Sought

CIGNA is seeking substantial monetary damages, which could potentially run into billions of dollars given the high prices of the drugs in question and the extended period over which the alleged anticompetitive conduct occurred.

Key Legal Issues

Statute of Limitations

One of the primary legal hurdles in this case is the statute of limitations. The Clayton Act imposes a four-year statute of limitations for damages actions under the Sherman Act. Celgene has argued that many of CIGNA's claims are time-barred.

Proving Anticompetitive Conduct

CIGNA faces the challenge of proving that Celgene's actions were indeed anticompetitive and not merely aggressive business practices. This involves demonstrating that Celgene's conduct had no legitimate business justification and was intended solely to maintain monopoly power.

Causation and Damages

To succeed, CIGNA must establish a clear causal link between Celgene's alleged anticompetitive conduct and the higher prices paid by CIGNA. Quantifying these damages accurately will be crucial to the case.

The Broader Context: Pharmaceutical Industry Practices

REMS Abuse Allegations

The case shines a spotlight on the alleged abuse of Risk Evaluation and Mitigation Strategies (REMS) programs. These FDA-mandated programs, designed to ensure safe use of potentially dangerous drugs, have been criticized as tools for brand-name manufacturers to deny samples to generic competitors.

Patent Thickets and Evergreening

CIGNA's allegations also touch upon the controversial practices of creating "patent thickets" and "evergreening" – strategies used by pharmaceutical companies to extend patent protection and delay generic competition.

Potential Implications of the Case

For the Pharmaceutical Industry

A ruling in favor of CIGNA could have far-reaching consequences for the pharmaceutical industry, potentially forcing companies to reevaluate their strategies for maintaining market exclusivity for branded drugs.

For Healthcare Costs

If successful, this case could pave the way for increased generic competition in the market for high-priced specialty drugs, potentially leading to significant cost savings for insurers and patients alike.

For Antitrust Enforcement

The outcome of this case may influence future antitrust enforcement actions in the pharmaceutical sector, potentially emboldening regulators and other plaintiffs to challenge similar practices.

Comparative Analysis: Similar Cases

FTC v. Actavis

This landmark Supreme Court case from 2013 addressed the legality of "pay-for-delay" settlements between brand-name and generic drug manufacturers. The Court's ruling that such agreements could violate antitrust laws has relevance to the settlement agreements alleged in the CIGNA case.

Mylan v. Celgene

In a previous case, generic manufacturer Mylan sued Celgene over similar allegations of sample-blocking for Thalomid and Revlimid. This case, which settled in 2019, provides important context for understanding Celgene's alleged practices.

Expert Opinions and Industry Reactions

Antitrust Scholars' Perspectives

Professor Herbert Hovenkamp, a leading antitrust scholar, has commented on the case:

"This litigation highlights the ongoing tension between patent protection and antitrust law in the pharmaceutical industry. The courts will need to carefully balance innovation incentives with the need for robust competition."

Industry Analysts' Views

Wall Street analysts have been closely watching the case. As one analyst from J.P. Morgan noted:

"The outcome of this litigation could have significant implications for Celgene's revenue stream and Bristol-Myers Squibb's future earnings projections. It's a case that could reshape the landscape of specialty drug pricing."

Procedural History and Current Status

Filing and Initial Motions

The case was filed in 2021, with Celgene promptly moving to dismiss many of CIGNA's claims on statute of limitations grounds and for failure to state a claim.

Recent Developments

As of the latest available information, the court has not yet ruled on Celgene's motion to dismiss. Both parties continue to file supplemental briefs and engage in preliminary discovery disputes.

Potential Outcomes and Their Implications

Scenario 1: CIGNA Prevails

If CIGNA wins, it could result in:

• Substantial damages awarded to CIGNA
• Potential changes in Celgene's business practices
• Increased scrutiny of similar practices across the industry

Scenario 2: Celgene Prevails

A victory for Celgene might:

• Reinforce the legitimacy of certain lifecycle management strategies for branded drugs
• Potentially embolden other pharmaceutical companies to employ similar tactics

Scenario 3: Settlement

Given the high stakes and complex issues involved, a settlement remains a possibility. This could involve:

• Financial compensation to CIGNA
• Agreements on future pricing or business practices
• Potential early entry dates for generic versions of the drugs in question

The Role of Regulatory Bodies

FDA's Stance

The Food and Drug Administration (FDA) has expressed concern over the use of REMS programs to block generic competition. In 2019, then-FDA Commissioner Scott Gottlieb stated:

"We're not going to allow REMS to become a tool for branded companies to delay or block generic competition."

FTC's Interest

The Federal Trade Commission (FTC) has been actively investigating and challenging anticompetitive practices in the pharmaceutical industry. While not directly involved in this case, the FTC is likely watching it closely for potential enforcement implications.

Key Takeaways

1. The CIGNA v. Celgene case highlights the ongoing tension between patent protection and antitrust concerns in the pharmaceutical industry.

2. The litigation focuses on alleged anticompetitive practices related to two high-priced specialty drugs, Revlimid and Thalomid.

3. Key legal issues include the statute of limitations, proving anticompetitive conduct, and establishing causation and damages.

4. The case has potential far-reaching implications for the pharmaceutical industry, healthcare costs, and antitrust enforcement.

5. The outcome could influence future strategies for both brand-name and generic drug manufacturers.

6. Regulatory bodies like the FDA and FTC are closely monitoring developments in this area.

7. The case underscores the complex interplay between innovation, competition, and consumer welfare in the pharmaceutical sector.

FAQs

1. Q: What are the main allegations in the CIGNA v. Celgene case? A: CIGNA alleges that Celgene engaged in anticompetitive practices to maintain monopoly power over its drugs Revlimid and Thalomid, including refusing to provide samples to generic manufacturers, abusing patent processes, and engaging in sham litigation.

2. Q: How might this case impact drug prices? A: If CIGNA prevails, it could lead to increased generic competition for high-priced specialty drugs, potentially resulting in lower prices for consumers and insurers.

3. Q: What is a REMS program and why is it relevant to this case? A: REMS (Risk Evaluation and Mitigation Strategies) are FDA-mandated safety programs. The case alleges that Celgene misused these programs to prevent generic manufacturers from obtaining drug samples needed for developing competing products.

4. Q: How does the statute of limitations affect this case? A: The four-year statute of limitations under the Clayton Act is a key issue, with Celgene arguing that many of CIGNA's claims are time-barred.

5. Q: What potential outcomes could this case have? A: Possible outcomes include a court ruling in favor of either party, which could lead to damages and changes in industry practices, or a settlement agreement that could involve financial compensation and agreements on future business practices.

Sources cited: [1] https://litigationtracker.law.georgetown.edu/wp-content/uploads/2024/12/Mylan_2024.06.11_DEFENDANTS-NOTICE-OF-SUPP.-AUTHORITY-ISO-MOT.-TO-DISMISS.pdf