Gilead Reaches $247M Settlement in Antitrust Lawsuit

In a significant development, KPH Healthcare Services, Inc., commonly known as Kinney Drugs, Inc., has successfully reached a settlement in an ongoing legal battle against pharmaceutical giant Gilead Sciences, Inc. The lawsuit, filed under the title “In Re: HIV Antitrust Litigation,” accused Gilead of engaging in anticompetitive practices related to its HIV drugs. The settlement, amounting to an impressive $246.75 million, is poised to benefit direct-payor plaintiffs (DPPs) and marks a pivotal moment in the fight against monopolistic tactics within the pharmaceutical industry.

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Allegations of Anticompetitive Behavior

At the core of the lawsuit were allegations that Gilead employed tactics to stifle competition and maintain its dominance in the market. The company purportedly resorted to “pay-for-delay” strategies, whereby Gilead sought to hinder the entrance of generic alternatives to its HIV drugs. This alleged behavior particularly targeted patients whose previous drugs had generic alternatives available. The plaintiffs contended that Gilead utilized these tactics to shift HIV patients from the older drugs to its newer offerings, thereby maintaining its hold on the market and obstructing fair competition.

A Landmark Settlement

The settlement agreement, now pending preliminary court approval, represents a substantial step toward holding pharmaceutical giants accountable for their actions. Under the terms of the settlement, Gilead will pay a staggering $246.75 million to the direct-payor plaintiffs. Additionally, the settlement fund will cover all administrative expenses, court-approved attorney fees, costs, and a service award for the representative plaintiff. After these allocations, any remaining funds will be distributed pro rata to class members who can provide a valid claim based on their purchase of specific drugs, including Truvada, Atripla, and their generic equivalents. A hearing to review and approve the settlement is scheduled for September 21, 2023.

Antitrust Allegations and Their Complexity

The litigation originated in 2020 and revolved around claims brought forth by both indirect purchasers and direct purchasers of certain combination antiretroviral therapy (cART) drugs designed to combat HIV. The drugs in question were produced or sold by Gilead, along with BMS and Janssen. The lawsuit included a spectrum of claims, primarily revolving around Gilead’s alleged manipulation of the market through various tactics.

These claims encompassed:

• TAF Claims: Accusations that Gilead delayed the launch of its new drug, TAF, until the introduction of a generic alternative of its older drug, TDF, was imminent. Gilead was purportedly involved in tactics to compel HIV patients to switch from TDF drugs to TAF drugs.
• NGR Claims: The lawsuit also centered around collaboration agreements between Gilead and BMS, which allegedly contained provisions restraining generic competition. These No-Generic Restraint (NGR) clauses reportedly hindered collaboration partners from creating competing products.
• MFE/MFEP Claims: The third category of claims related to an alleged settlement agreement between Gilead and Teva. It was claimed that Gilead agreed to delay Teva’s entry into the market, in exchange for Teva receiving preferential treatment in terms of market entry.

The Path Forward

This settlement stands as a significant moment in the ongoing effort to ensure fair competition within the pharmaceutical sector. The court’s recognition of the complexities involved in antitrust litigation and its recent ruling on summary judgment motions showcase the evolving landscape of legal battles against industry giants. As the court proceeds to review and approve the settlement, the outcome could potentially set a precedent for addressing similar anticompetitive behaviors in the future.

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