HIV Drug Producer and Pharmaceutical Company Accused of Anticompetitive Conduct Scheme

Plaintiff Humana Inc. has filed individual suits against Teva Pharmaceuticals USA, Inc. and Gilead Sciences, Inc. over allegations that they worked together to produce an anticompetitive scheme that allowed them both to extract “enormous profits.” The suit, filed Monday in the Northern District of California, details Humana’s belief that the misconduct constitutes unlawful monopolization and violations of the Sherman Antitrust Act and other state laws. They assert that absent intervention, customers of Teva and Gilead will continue to sustain “damages in the form of overcharges.”

Human Immunodeficiency Virus, or HIV, can best be treated by antiretroviral drugs. Gilead Sciences, Inc. (Gilead) produces HIV drugs that more than 80% of U.S. patients use every day. Given their domination of the market, Gilead is able to determine their own pricing. Humana notes in the complaint that Gilead’s “ability to sustain supracompetitive profits in its multi-billion-dollar HIV treatment franchise has been engineered through a comprehensive, illegal scheme to blockade competition.”

Litigation beginning in 2009 culminated in a 2013 settlement between Gilead and Teva where Teva agreed to delay their production of a generic version of an HIV drug, Viread, to six weeks before Gilead’s patents protecting the drug were set to expire. In exchange for this, Gilead would grant them a period of exclusivity (prior to patent expiration) where they would be the only seller of generic Viread, a deal that was worth over $100 million to Teva.

A year later, the two companies announced another settlement in which production of other generic HIV drugs – Truvada and Atripla – would be delayed, while Teva was again guaranteed exclusivity for 6 months by Gilead regarding the two products. This deal was worth an estimated $1 billion to Teva. If these settlements had not been made between Teva and Gilead, Humana posits that generic versions of HIV drugs would have launched years earlier and would have “driven down prices to competitive levels.”

The anticompetitive conduct that Teva has engaged in led the plaintiff to purchase quantities of the aforementioned drugs at artificially inflated prices. These prices have led Humana to sustain “substantial loss and damage to its business and property in the form of overcharges.”

The complaint cites unjust enrichment, conspiracy to monopolize, conspiracy to restrain trade, and violations of the Sherman Antitrust Act, California Cartwright Act, various state unfair and deceptive trade practices and consumer protection, and various state antitrust laws. Humana is seeking favorable judgement on all counts, permanent injunctive relief, actual, consequential, and compensatory damages, equitable relief, litigation fees, and any other relief deemed proper by the court.

Humana is represented in the litigation by Crowell & Moring LLP.