Court Denies J&J's Motion to Dismiss in Walgreen and Kroger Antitrust Suit

December 17, 2018
Samantha DiGrande

Johnson and Johnson (J&J) recently filed a motion to dismiss in the antitrust claim brought against the company by Walgreen and Kroger in regard to sales of J&J’s reference infliximab product, Remicade. In early December, the District Court for the Eastern District of Pennsylvania denied the motion.

Johnson and Johnson (J&J) recently filed a motion to dismiss in the antitrust claim brought against the company by Walgreen and Kroger in regard to sales of J&J’s reference infliximab product, Remicade. In early December, the District Court for the Eastern District of Pennsylvania denied the motion.

In June 2018, Walgreen and Kroger filed an antitrust suit against J&J and its Janssen division seeking permanent injunctive relief and damages “arising out of [J&J and Janssen’s] unlawful exclusion of biosimilar competition to the brand name drug Remicade,” according to the suit.

The suit is similar to another antitrust suit filed by Pfizer against J&J in November 2017 in the same court. According to the suit, when Pfizer earned FDA approval for its infliximab biosimilar, Inflectra, it sold the product at a 15% discount to the wholesale acquisition cost (WAC) of the brand name drug. In addition, Merck also received FDA approval for its own biosimilar infliximab, Renflexis, in the same year which was sold at a 35% discount to the WAC cost of Remicade.

Despite the introduction of 2 lower-priced products, J&J maintained its hold on the market and limited its competitors to single-digit market share and has been able to increase the price of Remicade since the introduction of the biosimilars.

Walgreen alleged that J&J’s hold on the market is due to exclusionary practices enacted through “contracts and bundled discounts that have suppressed competition.” Furthermore, the suit states that J&J entered into agreements with insurers through which they agreed not to cover either of the biosimilar products on their respective plans, or to only do so in rare cases.

According to the order of dismissal, J&J moved to dismiss Walgreens and Kroger’s claim on 2 grounds: J&J alleged that the retailers’ claims did not sufficiently allege antitrust violations, and that because the retailers do not have consent from the distributors to pursue these claims, they lacked antitrust standing.

On the first ground, the court found that, similar to the case brought by Pfizer, the complaint “plainly and repeatedly emphasizes that, as a result of the anticompetitive behavior,” the plaintiffs have “paid inflated prices for those products.”

Finally, in regard to the second ground, the Court converted J&J’s motion into one for summary judgement, and will hear additional evidence and briefing. “Motions must be submitted within 45 days and any factual development shall be limited to whether the assignment to Retailer Plaintiffs was valid,” read the order.

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