The US Court of Appeals for the Fourth Circuit revived an antitrust suit alleging that a pharmaceutical manufacturer illegally maintained its monopoly for its innovator drug by precluding competition beyond the expiration date of the patent covering the drug. The Court found that the case was filed within the statute of limitations because the antitrust claims did not accrue until the consumers were injured by paying supracompetitive prices for the drug after the patent expired. Baltimore v. Actelion Pharm., Ltd., Case No. 19-2233 (4th Cir. Apr. 13, 2021) (Niemeyer, J.)
Actelion received an exclusive license under a patent issued in 1994 for Tracleer, the “only oral treatment for pulmonary arterial hypertension.” Although Actelion’s patent for Tracleer expired in November 2015, no competitor brought a generic version of Tracleer to market. The mayor of Baltimore and Baltimore’s Government Employees Health Association (collectively, Baltimore) alleged that Actelion intended to “preclud[e] competition from generic drug manufacturers” by orchestrating a “multi-year scheme” to prevent multiple manufacturers from attempting to bring a generic version of the drug to market. According to the complaint, from 2009 to 2012, four generic drug manufacturers repeatedly requested samples of Tracleer from Actelion to develop generic versions of the drug. Potential entrants must obtain samples of a branded drug to demonstrate that a generic drug is bioequivalent to the branded drug—in this case, Tracleer. Baltimore alleged that Actelion refused consistently, stating it had the right to elect with whom it did business. Actelion also allegedly prevented distributors from selling Tracleer samples to generic drug manufacturers.
Baltimore alleged that by precluding generic competitors from the market, Actelion was able to maintain an illegal monopoly over Tracleer for three years after its patent expired and charge inflated prices for the drug in violation of § 2 of the Sherman Act and various state antitrust and consumer protection laws. Baltimore alleged that but for Actelion’s conduct, consumers would have purchased less expensive generic alternatives instead of branded Tracleer. Baltimore filed suit on November 19, 2018. The district court dismissed Baltimore’s complaint, finding that the majority of the claims were barred by the four-year statute of limitations. The district court found that the last overt anticompetitive act occurred in February 2014, when Actelion executed settlement agreements with several generic manufacturers. The district court rejected Baltimore’s argument that the claims accrued on the date of patent expiration (November 2015) or, in the alternative, from each sale of Tracleer at supracompetitive prices. Baltimore appealed.
The Fourth Circuit determined that the November 2018 suit was not time-barred by the statute of limitations. The Court found that although Actelion’s last overt anticompetitive act took place in 2014, the alleged harm to the plaintiffs did not begin until November 2015 when the patent expired. Section 4 of the Clayton Act provides a private right of action for violations of federal antitrust laws and states that any such action is “barred unless commented within four years after the cause of action accrued.” The Court further noted that the Supreme Court [...]