In Antitrust Case Over Remicade, J&J Wins the Right to Arbitration

The United States Court of Appeals for the Third Circuit has sided with Johnson & Johnson (J&J) and its Janssen division, requiring a dispute between the Remicade maker and Rochester Drug Cooperative to be sent to arbitration.
Kelly Davio
September 16, 2019
The United States Court of Appeals for the Third Circuit has sided with Johnson & Johnson (J&J) and its Janssen division, requiring a dispute between the Remicade maker and Rochester Drug Cooperative (RDC) to be sent to arbitration.

RDC is a direct purchaser and wholesaler of Remicade, J&J’s brand-name infliximab. RDC had alleged that J&J engaged in anticompetitive practices related to its “Biosimilars Readiness Plan,” which RDC said included exclusionary contracting with insurers, product bundling with insurers, and similar contracting and bundling with healthcare providers.

In its complaint, filed in 2018, RDC noted that, despite competition from biosimilars, J&J’s brand-name infliximab maintained and even increased its prices. “J&J did not achieve this unusual result by competition on the merits,” said the complaint, “but instead through a multifaceted scheme to block biosimilar competition to Remicade through a web of exclusive dealing contracts.”

RDC brought claims against J&J under the Sherman Act based on alleged anticompetitive conduct, and J&J later moved to compel arbitration of the dispute, saying that the claims arose out of a 2015 distribution agreement between J&J and RDC and the agreement contains a clause related to resolution of disputes. According to J&J, the courts must rigorously enforce the terms of arbitration agreements, and RDC is obligated to arbitrate antitrust claims against the drug maker because Remicade is one product specifically referenced in the 2015 agreement between the 2 parties.

A district court, in October 2018, denied J&J’s motion to compel arbitration, saying that RDC’s claims could not be resolved based on the agreement. On appeal, however, the court agreed with J&J, and reversed the district court’s judgment in the case, saying that RDC’s claims relate to the 2015 agreement and therefore must be subject to arbitration.

This case is just one of multiple cases related to J&J’s strategy to defend its market share for infliximab. In 2017, Pfizer filed an antitrust suit against J&J, alleging that the drug maker’s tactics had effectively denied patients access to biosimilar therapies (including Pfizer’s Inflectra) and undermined price competition in the biologics marketplace.

Additionally, in July of this year, a regulatory filing by Janssen revealed that the Federal Trade Commission had issued civil subpoenas to J&J as part of an antitrust investigation into the drug company’s contracting practices.

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