Lawsuit Over Atripla, Truvada Pay-to-Delay Generics Scheme Results in Defense Verdict for Gilead, Teva

A federal jury in California has found that Gilead and Teva are not liable for an alleged “pay-to-delay” scheme, in which plaintiffs accused the companies of conspiring to keep generic versions of the HIV drugs Atripla and Truvada off the market, in order to maximize profits for the brand-name drugs.

A jury in the Northern District of California handed down a defense verdict on June 30, ruling against plaintiffs who said Gilead made a $1 billion “reverse payment” to Teva to delay the release of generic Truvada and Atripla versions of the widely used HIV drugs.

The case is at least the third such antitrust and patent lawsuit trial over the pay-to-delay generics scheme to end in a defense verdict to date. However, in addition to the antitrust litigation, Gilead still faces hundreds of HIV drug lawsuits brought by individual users, who allege the drug maker failed to adequately warn about side effects associated with the certain medications, and withheld safer designs for years.

Each of the injury plaintiffs indicate they suffered renal failure, kidney injury, bone loss, fractures or other complications associated with bone deterioration following exposure to tenofovir disoproxil fumarate (TDF) based HIV drugs sold by Gilead in recent years, including Viread, Truvada, Atripla, Complera and Stribild.

According to the injury complaints, Gilead has known for years that a less toxic version of the drugs could be developed, involving the antiviral tenofovir alafenamide fumarate (TAF), yet the drug maker continued to sell the more toxic versions without adequate warnings. It was only when it was going to face competition from generic equivalents, which would diminish sales, that the drug maker introduced and marketed TAF-based drugs, promoting them as safer than the toxic TDF-drugs they had sold for years.

Injury plaintiffs allege that the decision to withhold development of TAF-based drugs was part of a scheme intended to allow Gilead to maintain an essential monopoly on HIV treatments until at least 2032. However, as a result of this decision to place profits before consumer safety, thousands of individuals nationwide have been left with severe injuries that may have been avoided.

While some cases have been filed in federal court, the majority of the claims have been filed in California state courts. Given common questions of fact and law, the litigation is being coordinated in California state court during discovery and a series of early “bellwether” trials will be scheduled to help the parties gauge how juries are likely to respond to certain evidence and testimony that will be repeated throughout hundreds of claims.

HIV Drug Pay-to-Delay Lawsuits

The antitrust lawsuits involve similar, but distinct allegations, indicating that Gilead paid Teva $1 billion to keep its generic versions of its HIV drugs off the market, allowing Gilead to maximize profits by keeping cheaper alternatives off the market, and forcing patients to pay higher prices when more affordable versions could have been available earlier.

However, Gilead argued that the payment promoted competition and allowed Teva to actually put its generic options on the market before the company’s patent protection on the TDF drugs officially expired.

Teva was given 180 days of exclusivity with its generics before Gilead allowed another generic version of the drugs to enter the market.

Before the trial, Gilead and Teva reached settlements with some of the plaintiffs involved, including CVS Pharmacy, Rite Aid and Walgreens. The other remaining plaintiffs included insurers, health plans and other drug purchasers.

It is the third defense verdict following a trial regarding patent lawsuits over Gilead’s HIV drugs. In May, a Delaware federal court ruled against a similar lawsuit filed by the U.S. government, which accused Gilead of illegally profiting from taxpayer research through the sale of Truvada and Descovy as pre-exposure prophylaxis (PrEP) treatments to prevent HIV.

The government claimed it spent hundreds of millions of dollars in clinical studies to help develop the two drugs, which Gilead has profited from by selling the drugs to taxpayers at inflated prices.