Drug company Eli Lilly was fined R$36.6 million (€7.5 million) yesterday by Brazil’s competition authority for filing sham lawsuits to prolong its monopoly over a cancer drug.
Brazil’s Administrative Council for Economic Defence decided Eli Lilly gained an illegal monopoly on the breast cancer drug Gemzar between 2007 and 2008, which raised prices to R$540. The difference between this cost, and the price of R$189 once exclusivity was removed in March 2008, constitutes "serious harm to public health and economy," the authority said.
CADE also found Eli Lilly gained exclusive rights over the drug for therapeutic purposes beyond breast cancer by obtaining a court decision in a proceeding where the company omitted relevant information. This prevented rival drugmaker Sandoz from marketing Gemcit, which is aimed at treating any cancer.
In 1996 Eli Lilly was granted a patent on gemcitabine hydrochloride, the active ingredient in Gemzar.
After being repeatedly refused permission to extend the patent for the drug’s production, the company began filing what the authority said were "contradictory and misleading lawsuits" against the national health agency, Anvisa, in multiple jurisdictions in Brazil to prevent a final decision on the patent’s expiry.
CADE’s reporting commissioner, Ana Frazão, said, "The respondent practised sham litigation by filing a lawsuit against ANVISA in order to obtain the exclusive rights over the sales of Gemzar, being aware that the patent request was exclusively related to its production process. The company also did not inform the judge of the Federal District that the amendment to the original request had been denied in the lawsuit filed in Rio de Janeiro."
Eli Lilly said in a statement that it "is convinced that it has the necessary arguments to demonstrate that it did not commit any anticompetitive and/or patent violation. Moreover, these arguments will be the basis for an appeal to CADE and, if necessary, to the courts, so that Eli Lilly do Brasil[’s] strong arguments prevail."
The case over the patent for the drug has been running for 15 years. The long-running dispute has involved patent request, amendments, national and regional courts.
Levy & Salomão Advogados partner Ana Paula Martinez in São Paulo said the case fits with recent trends in Brazil.
"Sham litigation cases in the pharmaceutical sector seem to rank high in CADE’s agenda," Martinez said. "Although CADE has not been shy about intervening, there is also fair number of investigations dismissed in the past such as Sanofi-Aventis/Plavix and Janssen Cilag/Velcalde."
Joyce Honda, a partner at Souza Cescon Barrieu & Flesch Advogados, agrees, but highlights the role patent law played in the case.
"CADE has faced sham litigations complaints before (Seva/Siemens VDO), but the peculiarity in this case was the intellectual property rights issue," Honda said. "Therefore, CADE had to make a parallel between sham litigation and abuse of IP rights."
Guilherme Ribas, partner at Mundie e Advogados, said the role of IP in the case may indicate a change in CADE’s review of matters involving patent rights, which he says is more interesting than the sham litigation.
"CADE has, for a long time, been uncomfortable intervening on cases with patent infringements. This is an interesting change with CADE. Maybe they will be more comfortable reviewing cases like this in the future," Ribas said.
Yesterday’s fines relate to just two years of the dispute, but even these have taken eight years to resolve.
Ribas said this is not unusual for Brazil and was justified. "The case is so complex, it is right it took eight years."
Counsel to Eli Lilly
Grinberg Cordovil e Barros Advogados
Partner Mauro Grinberg in São Paulo
