Appeals Court Rules J&J Must Face Infliximab Antitrust Suit Brought by Walgreens, Kroger

The US Court of Appeals for the Third Circuit last week allowed 2 retail pharmacies to continue pursuing a lawsuit accusing Johnson & Johnson (J&J) of unlawfully restricting access to biosimilar infliximab while pressuring healthcare providers and payers to use its higher-priced originator product, Remicade.

The decision overturns a lower court ruling and reinstates a 2018 suit brought by Walgreens and Kroger, which alleges that J&J subsidiary Janssen “used its size and bargaining power in the broader pharmaceutical market to enter into exclusive contracts and anticompetitive bundling agreements with health insurers that suppressed generic competition to Remicade, which in turn allowed Janssen to sell Remicade at supracompetitive prices,” notes Friday’s decision.

At issue is whether the retailers have standing to accuse J&J of antitrust violations. Walgreens and Kroger had agreements with drug wholesalers, AmerisourceBergen and Cardinal Health, which in turn purchased Remicade from an affiliate of Janssen. The distribution agreement between the wholesalers and the Janssen unit contained a distribution agreement, governed by New Jersey law, barring the parties from assigning any rights or obligations under the agreement without written consent of the other party.

In 2018, the wholesalers reassigned the rights to the pharmacies, which later filed their suit.

Janssen made the argument that under New Jersey law, the anti-assignment provision prohibited the wholesalers from assigning its federal antitrust claims against Janssen to the pharmacies, depriving them of antitrust standing.

In March 2019, the District Court granted the motion for summary judgment and ruled in Janssen’s favor on all counts, saying that Janssen was a party to the distribution agreement with standing to enforce its term.

That’s not so, the Third Circuit Court of Appeals said.

“The antitrust claims are a product of federal statute and thus are extrinsic to, and not rights ‘under,’ a commercial agreement,” the court ruled, saying that antitrust claims are not granted by the terms of a contract.

It called J&J’s arguments in the case “unconvincing."

This case is one of several J&J is facing over Remicade, which was the sole infliximab on the market until 2016. Pfizer, which launched its biosimilar infliximab Inflectra that year, is pursuing its own antitrust suit against J&J. The FTC is also separately investigating the company over its conduct related to the drug.