Regeneron Pharm. v. Amgen Inc.
| Decision Date | 10 February 2023 |
| Docket Number | C. A. 22-697-RGA-JLH |
| Parties | REGENERON PHARMACEUTICALS, INC., Plaintiff, v. AMGEN INC., Defendant. |
| Court | U.S. District Court — District of Delaware |
Pending before the Court are two motions filed by Defendant Amgen Inc.: its Motion to Dismiss (D.I. 17) and its Motion to Stay (D.I. 27).[1]The motions are fully briefed (D.I. 18, 19 28, 34, 35, 36, 40, 41, 43, 47, 48), and I heard oral argument on January 6, 2023 (“Tr. ”). For the reasons below, I recommend that Amgen's motion to dismiss be DENIED, and I order that Amgen's motion to stay is DENIED.
Plaintiff Regeneron Pharmaceuticals, Inc. (“Regeneron”) and Defendant Amgen Inc. (“Amgen”) are pharmaceutical companies. They sell competing drugs in a class of drugs known as PCSK9 inhibitors. PCSK9 inhibitors are monoclonal antibody drugs that can help high-risk patients lower their LDL cholesterol, aka “bad cholesterol.” Amgen's product is called Repatha®. Regeneron's rival product is Praluent®.
Each company has patents covering the specific amino-acid sequence in its product. Amgen also has patents with claims that cover a genus of antibodies that bind to specific residues on PCSK9 and block it from binding to LDL receptors. In a separate litigation, Amgen alleged that Regeneron's Praluent infringed Amgen's genus claims. The Court of Appeals for the Federal Circuit held that Amgen's genus claims were invalid for lack of enablement. Amgen Inc. v. Sanofi, 987 F.3d 1080 (Fed. Cir. 2021). That case is now pending before the Supreme Court; oral arguments are scheduled for March 27, 2023. Amgen Inc. v. Sanofi, 143 S.Ct. 399 (2022) ().
This case also concerns Praluent and Repatha, but it is not a patent infringement case. In this case, Regeneron is the plaintiff, and it alleges that Amgen has violated the antitrust laws by undertaking an anticompetitive campaign to drive Praluent out of the PSCK9 inhibitor market. (D.I. 1 (Complaint) ¶ 13.) The core allegation-and the allegation that the parties' briefs focus on-is that Amgen is giving pharmacy benefit managers (“PBMs”) rebates on other drugs- specifically, its blockbuster drugs Otezla® and Enbrel®[2]-in return for exclusive or preferred formulary placement for Repatha.[3]According to the Complaint, the size of the rebates on Otezla and Enbrel, and the fact that Otezla has monopoly power and Enbrel has market power, leave the PBMs with “no viable choice” but to accept Amgen's offer and to exclude Praluent from their formularies. (Id. ¶¶ 17, 113-123, 148.)
Regeneron's Complaint is 102 pages long. (D.I. 1.) This matter comes before me on a motion to dismiss, so I must accept the allegations in the Complaint as true and view them in the light most favorable to Regeneron. Because I write primarily for the parties and the District Judge, I assume general familiarity with the allegations and terminology used in the Complaint. The most pertinent allegations are as follows.
Amgen's Repatha has monopoly power in the PCSK9 inhibitor market. (Id. ¶ 110.) Amgen's Otezla has monopoly power in the moderate-to-severe psoriasis market. (Id. ¶¶ 113, 117.) Amgen's Enbrel has market power in the rheumatoid arthritis market. (Id. ¶¶ 122-23.)
A rebate of $210 million over two years and four months comes out to approximately $90 million per year. (Id. ¶ 89.) If that $90 million in annual rebates is attributed only to sales of Repatha, it results in Repatha being priced “far lower than any appropriate estimate of Amgen's corresponding costs.” (Id. ¶¶ 89-94.) To match Amgen's $90 million annual rebates to ESI Commercial, Regeneron would have had to sell Praluent at a loss. (Id. ¶ 79.) “Nor [was] Regeneron able to match Amgen's bundled rebate by offering an equivalent bundle across its portfolio, which lacks the massive products subject to PBM rebating that could offset Amgen's coercive rebates for Otezla® or Enbrel®.” (Id.) Because Regeneron did not match Amgen's rebate offer, ESI Commercial made the deal with Amgen, and, “[s]ince January 1, 2021 and through at least January 1, 2023, ESI Commercial's National Preferred Formulary . . . allow[ed] only Repatha® to be covered for consumers whose plans follow ESI Commercial's National Preferred Formulary.”[4] (Id. ¶ 80.)
Regeneron makes similar allegations regarding UHC/Optum, which has 7.05% of the PCSK9 inhibitor market. (Id. ¶ 96.) Prior to September 2021, UHC/Optum's Commercial Formulary allowed members covered by UHC/Optum to be prescribed either Repatha or Praluent. (Id. ¶¶ 83-84.) “Starting on September 1, 2021, UHC Commercial moved to an exclusive relationship with Repatha®, and, starting on January 1, 2022, Optum Commercial also moved to an exclusive relationship with Repatha®.” (Id. ¶ 84.) “Regeneron was . . . informed by UHC/Optum in May 2021 during negotiations for formulary access that there were further negotiations happening behind the scenes with Amgen,” and Regeneron believes that “Amgen opted to structure its rebate offer to UHC/Optum similar to its offer to ESI Commercial, using a portfolio of drugs across multiple therapeutic drug classes to secure Repatha®'s exclusive position, where the effective price of Repatha® in the bundle was below cost.” (Id.)
Regeneron has also been told in “negotiations with other Third-Party Payors that Amgen made a broad portfolio offer for Repatha® that would allow for a higher absolute rebate value with the anti-inflammatory therapeutic class, i.e., Otezla® and Enbrel®.” (Id. ¶ 86.) As of January 2022, Praluent was “‘not covered' on formularies of Payors accounting for at least 50% of the total prescriptions in the PCSK9 [inhibitor] market.” (Id. ¶ 96.) Regeneron says that, “starting in 2022, [it] will no longer even be able to make a profit selling Praluent®” and that it is being “forc[ed] . . . to consider investing its resources elsewhere with an exit from the market altogether.”
A defendant may move to dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible on its face when the complaint contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. A possibility of relief is not enough. Id. “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. (quoting Twombly, 550 U.S. at 557). In determining the sufficiency of the complaint under the plausibility standard, all “well-pleaded facts” are assumed to be true, but legal conclusions are not. Id. at 679.
“[W]hen the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should be exposed at the point of minimum expenditure of time and money by the parties and the court.” Twombly, 550 U.S. at 558 (internal marks omitted). “Antitrust claims in particular must be reviewed carefully at the pleading stage because false condemnation of competitive conduct threatens to ‘chill the very conduct the antitrust laws are designed to protect.'” In re Keurig Green Mt. Singleserve Coffee Antitrust Litig., 383 F.Supp.3d 187, 218 (S.D.N.Y. 2019) ). However, the same Twombly plausibility standard applies. W. Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010) ().
A district court has broad discretion to grant or deny a motion to stay. Apotex, Inc. v. Senju Pharma Co., 921 F.Supp.2d 308, 313 (D. Del. 2013). In exercising their discretion, courts in this district generally...
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