Partial Win Likely for Celgene in Mylan
Antitrust Suit

A New Jersey federal judge indicated Wednesday that she would give Celgene Corp. a partial win in an antitrust suit from Mylan Pharmaceuticals Inc. over cancer drugs Thalomid and Revlimid, saying Celgene likely could be held liable for its conduct after Mylan received approval of testing protocols but not before.

Addressing Celgene’s summary judgment bid, U.S. District Judge Esther Salas said evidence suggests it was “not objectively unreasonable” for Celgene to require that blessing from the U.S. Food and Drug Administration before Celgene would sell samples of the drugs to Mylan to perform bioequivalence testing required by regulators as part of the approval process for generic versions.

Celgene thus seems entitled to summary judgment on Mylan’s claims that the company should have sold the samples before Mylan informed Celgene of such FDA approval, the judge said during a hearing in her Newark courtroom.

Based on the evidence,“a reasonable jury could not find that Celgene had no objectively … legitimate business justification for not selling Mylan samples of Thalomid and Revlimid before obtaining an assurance from the FDA,” Judge Salas said.

But the judge said she would likely deny summary judgment as to Celgene’s conduct after receiving notice of FDA approval, citing “genuine issues of material facts” that would enable a reasonable jury to infer that Celgene had no objectively legitimate business justification for not selling the samples at those points in time.

“I’m smelling disputed fact here,” Judge Salas said earlier in the hearing during a discussion of such post-FDA-approval conduct. The judge indicated that she would issue a written opinion at a later date.

The long-running litigation — filed in April 2014 and now “one of the oldest cases on my docket,” the judge said — alleges Celgene blocked access to the Thalomid and Revlimid samples to maintain its monopolies over the drugs and prevent lower-priced generic competition from entering the market.

Celgene has countered that the company had valid business justifications for insisting upon certain terms before dealing with Mylan, including that Mylan obtain FDA approval of safety protocols for bioequivalence testing.

“If the conditions we placed … on the dealing here … are valid business justifications, we win,” Celgene attorney John Schmidtlein told Judge Salas on Wednesday.

Mylan attorney Jonathan Jacobson, however, stressed that the FDA has made it clear that obtaining such approval of testing protocols is not legally required. Jacobson noted how FDA Commissioner Scott Gottlieb has criticized brand-name drugmakers for “shenanigans” aimed at stifling lower-cost competition.

“The FDA has been strident about this issue, because of behavior largely of Celgene and other companies,” Jacobson said. “There is no requirement to get FDA approval, but in any event, we did.”

But Judge Salas indicated that she was looking into the objective reasonableness of a company with safety concerns. “We’re not talking about legality here,” she said.

The judge highlighted that a Mylan expert said it was not unreasonable to get such assurances from the FDA, but Jacobson said the company believes that claim is incorrect, and that it was not an admission by Mylan and “is something that the jury will have to weigh.”

Judge Salas also pointed out how Mylan itself had sought FDA assurances from other companies.

“It’s a good business decision when Mylan does it but not so good when Celgene does it?” the judge asked Jacobson.

Jacobson said that was an unfair comparison, because Mylan had not been playing games and those companies received samples within a year, adding that “what Mylan does is not a defense to what Celgene does.”

Based on the judge’s likely finding on liability over pre-FDA-approval conduct, she indicated that Mylan may not be able to recover damages for Revlimid in light of the damages model in question.

While the judge indicated that summary judgment was likely appropriate with respect to Celgene’s pre-FDA-approval conduct, she cited various issues related to the company’s post-approval conduct that warranted bringing such claims before a jury.

Judge Salas noted, for example, that Mylan informed Celgene in November 2007 that it had received FDA approval of protocols for testing Thalomid and that Mylan was prepared to purchase samples. In January 2008, Celgene requested more information from Mylan, but did not explicitly ask for an FDA letter approving the protocols, according to the judge.

In June of that year, Mylan wrote to Celgene, reiterating that it had received FDA approval, providing information requested by Celgene and stating it would enter into an appropriate indemnification agreement, the judge said. Celgene responded in August that it was reviewing the materials provided by Mylan, the judge said.

The judge stressed that Celgene ultimately wrote to Mylan in June 2009, saying that Mylan had not provided a copy of the FDA approval letter and the protocols.

Referring to the timing of Celgene’s June 2009 request, Judge Salas asked Schmidtlein, “Isn’t that a fact that a jury could reasonably find that … your procompetitive reasons and your business justifications may be pretextual?”

Schmidtlein asserted that Mylan initially did not provide the FDA approval letter to Celgene, because of various qualifications included in the document.

The judge said jurors may accept that argument, but added, “Aren’t these issues of fact that have to go to a jury?”

Arguing for Mylan was Jonathan Jacobson of Wilson Sonsini Goodrich & Rosati PC.

Arguing for Celgene was John Schmidtlein of Williams & Connolly LLP.

The case is Mylan Pharmaceuticals Inc. v. Celgene Corp., case number 2:14-cv-02094, in the U.S. District Court for the District of New Jersey.




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