Misuse of Citizens Petitions and Possible Path Forward for Generic Drug Manufacturers

Brand companies employ a variety of mechanisms to maintain their market exclusivity and delay generic entry. We have recently written about Johnson & Johnson’s rebate and bundling schemes in trying to hinder uptake of a Remicade® biosimilar. We have also written about Allergan’s attempts to sell its patents covering Restasis® to an Indian tribe in an effort to avoid inter partes review challenges. Well, Allergan again finds itself again in the middle of a dispute that touches on intellectual property, this time Allergan is alleged to have engaged in anticompetitive practices to delay generic competition because of its misuse of citizen petitions.

While citizen petitions are supposed to allow citizens an opportunity to raise legitimate safety concerns with the U.S. Food and Drug Administration (FDA), they have often been misused by innovator drug companies as a way of delaying generic market approval. One study analyzed all citizen petitions filed with the FDA between 2011 and 2015 that targeted pending generic drugs and found that innovator manufacturers file 92% of all the citizen petitions, with the FDA denying nearly all these petitions.

This situation arose recently in a class action case filed against Allergan Inc. alleging antitrust violations aimed at protecting its dry-eye drug Restasis®. Amongst other violations, the suit alleged that Allergan filed four baseless citizen petitions in an effort to hinder generic competition. Allergan filed a motion to dismiss this claim asserting that the suit was “meritless”.

Last week, however, U.S. District Judge Nina Gershon shot down Allergan’s efforts to sidestep the suit and sided with plaintiff union benefit plans and various pharmaceutical purchasers, claiming that it is probable that Allergan acted dishonestly in hindering generic competition.

In its ruling, the Federal judge declined to apply the Noerr-Pennington doctrine, which shields good-faith petitioning of the government even if it results in a competitive edge. She provided two reasons for not applying the doctrine.

First, Judge Gershon noted that the doctrine does not protect “objectively baseless” petitioning. Since the FDA denied each of Allergan’s petitions, the Judge found that it could be probably that the petitions were scientifically unfounded.

Second, Judge Gershon noted that that the doctrine does not protect actions that are solely intended to hinder competition. Since Allergan petitioned the FDA repeatedly asking for testing of generic Restasis® in human, something not required for generic drugs, and then did not appeal the FDA’s rejections of its petitions but instead filed subsequent petitions using duplicative motives, the Judge found that Allergan’s actions could show that Allergan filed the petitions with improper motives. According to Judge Gershon, “[i]t is highly plausible that a company willing to engage in such conduct was intending to delay the entry of generics into the market, rather than seeking to protect the public health.”

Citizen petitions are a legally protected act so attacking them under antitrust law has traditionally been difficult. To prove that a citizen petition violates the law, plaintiffs have to show they are so baseless that they constitute a total sham. This case shows that its is possible to clear the first hurdle in demonstrating that citizen petitions are a sham and thus shows a possible path forward for generic drug plaintiffs hit with such petitions in future disputes.