Attorney General Becerra Joins Coalition in Fight Against Pharmaceutical Company AbbVie Inc.’s Anticompetitive Practices

SACRAMENTO — California Attorney General Xavier Becerra yesterday joined a coalition of 20 state attorneys general in filing an amicus brief in the U.S. Court of Appeals for the Seventh Circuit to address significant issues of antitrust and anticompetitive pharmaceutical agreements involving AbbVie Inc.’s drug, Humira. AbbVie employed numerous strategies to prevent any competition to Humira, including entering into multiple anticompetitive agreements with rival drug companies that allowed AbbVie to raise the price of Humira and limit options for patients. Humira is used to treat inflammation that leads to autoimmune diseases such as Crohn’s disease, ulcerative colitis, rheumatoid arthritis, ankylosing spondylitis, psoriatic arthritis and plaque psoriasis.

“California residents spend billions of dollars on prescription drugs like Humira,” said Attorney General Becerra. “When companies like AbbVie are allowed to monopolize the market and hike up the price of these drugs, they put the lives of Californians at risk. During a global pandemic when people have more to worry about than ever, they shouldn’t also have to worry about whether they can afford their prescription medication. My office will continue to tackle these dangerous, collusive pay-for-delay agreements head on.”

Humira is the world’s largest selling drug, generating sales of some $20 billion a year and costing approximately $39,000 per year for treatment. AbbVie’s anticompetitive agreements, known as pay-for-delay agreements, allowed rival companies to compete against Humira outside the United States in 2018. But the agreements required the rival companies to delay the introduction in the U.S. of a competitive counterpart to Humira until 2023. With these pay-for-delay agreements, AbbVie could freely raise the price of Humira in the U.S. by 6.2 percent in 2019 followed by a 7.4 percent increase this year. While Humira prices are increasing in the U.S., they are decreasing in Europe where there is competition. Humira’s sky-high price tag and its scheme to protect the inflated Humira price hurts employers, patients, insurers and the government, who all shoulder the burden of those inflated prices.  

In California, Assembly Bill 824, which went into effect on January 1, 2020, gives the Attorney General a stronger platform to investigate and prosecute these illegal and harmful drug pricing practices.

In the brief, the coalition argues:

• The District Court misapplied the U.S. Supreme Court’s decision in FTC v. Actavis, Inc. (Actavis) to AbbVie’s agreements with its competitors. In Actavis, the U.S. Supreme Court held that the Federal Trade Commission could challenge pay-for-delay agreements under federal antitrust law. The attorneys general argue the lower court decision effectively resurrects the very antitrust immunity that the U.S. Supreme Court specifically rejected in FTC v. Actavis. They assert that the lower court’s approach will embolden other pharmaceutical companies to fashion illegal settlements to creatively evade scrutiny.
• The Appeals Court should follow the majority of the Courts of Appeal and apply the California Motor Transport rule to serial sham petitioning. Four U.S. Courts of Appeals have reached this conclusion, and in cases alleging serial sham petitioning, the court is presented with more information and is therefore better equipped to assess whether AbbVie misused the government process to curtail competition.

Attorney General Becerra has been aggressively fighting to lower the cost of healthcare, including prescription drugs, and keep California markets fair, open and competitive to protect patient choice. This year, Assembly Bill 824, which was sponsored by the Attorney General, went into effect, becoming the first state law to tackle pay-for-delay agreements and give the Attorney General a stronger platform to challenge collusive agreements under state antitrust law. In July 2019, Attorney General Becerra announced four settlement agreements totaling nearly $70 million against pharmaceutical companies for entering into pay-for-delay agreements.

In yesterday’s filing, Attorney General Becerra joined the attorneys general of Washington, Colorado, Connecticut, Delaware, Idaho, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New Mexico, New York, North Carolina, Oregon, Rhode Island, Virginia, and Wisconsin.

A copy of the brief is available here.