A major ruling recently came from the U.S. District Court in Boston: Japanese pharmaceutical giant Takeda Pharmaceutical lost its first-instance case in a "pay-for-delay" antitrust lawsuit, with a federal jury ordering it to pay initial damages of $885 million . Under the triple damages clause of U.S. antitrust law, this fine could ultimately soar to approximately $2.5 billion (about 17 billion yuan) .

" Payment Delay " agreements are a controversial business arrangement that has long existed in the pharmaceutical industry. The core logic is that when original drug manufacturers face patent challenges from generic drug manufacturers, they pay substantial compensation or share market profits in exchange for the generic drug manufacturers voluntarily abandoning their patent challenges and delaying the launch of their products.

This case revolves around Takeda's constipation treatment drug Amitiza (rubiprostone) . Developed by Sucampo and co-marketed by Takeda, the drug quickly became a blockbuster product after its launch in 2006, reaching peak annual sales of $400 million in 2014-2015.

In 2012, generic drug company Par Pharmaceutical launched a patent challenge against Amitiza, leading to litigation. In 2014, Takeda, Sucampo, and Par reached a settlement: Par agreed not to launch its own generic drugs before January 2021; in exchange, Par could sell licensed generic drugs supplied by Sucampo and share the profits according to a profit-sharing agreement.

In 2021, this settlement agreement triggered a massive class-action lawsuit. Plaintiffs included drug wholesalers, healthcare funds, insurance companies, and major retailers such as CVS and Walgreens. The plaintiffs alleged that the agreement, by paying consideration, artificially hindered the earlier market access of lower-priced generic drugs, resulting in a long-term lack of effective competition in the market and forcing the U.S. healthcare system to pay hundreds of millions of dollars in excessive fees for Amitiza.

After a five-week trial, a Boston federal jury ultimately sided with the plaintiffs. The $885 million single damages awarded were clearly structured: wholesalers collectively received $474.9 million, individual retailers collectively received $346.8 million, and end-payers collectively received $63.2 million.

What truly shook the industry was the mandatory triple damages rule of the U.S. Sherman Antitrust Act. Under this law, damages against wholesalers and retailers automatically triple upon the court's judgment , totaling $2.465 billion. The damages for end-payers still need to be determined through subsequent court proceedings. This means that Takeda's ultimate financial impact could very well approach $2.5 billion.

Despite losing the first instance trial, Takeda remained resolute. The company issued an emergency statement saying it would "actively pursue post-trial motions and formally file an appeal," emphasizing that it "remains convinced that the plaintiff's allegations are completely lacking in factual and legal basis," while also pointing out "multiple evidentiary and legal errors" during the trial.

On the financial front, Takeda stated that it is assessing the amount of reserves that need to be included in its fiscal year 2025 (ending March 31, 2026) financial statements and will revise and resubmit the financial statements as soon as possible. The company attempted to reassure the market, stating that the outcome of the lawsuit will not impact its core performance in fiscal year 2025, nor is it expected to have a significant impact on its overall financial forecast for fiscal year 2026. However, the adjusted free cash flow metric may be revised based on the final compensation amount and payment schedule.

It's worth noting that this antitrust loss is not Takeda's only recent legal trouble. Just days ago, Takeda reached a settlement with the U.S. Department of Justice regarding the "kickback scandal" involving its antidepressant Trintellix , paying a $13.67 million fine. Coupled with the company's May 13th announcement of a 4,500-person layoff plan and the patent cliff facing several blockbuster products, Takeda is experiencing a difficult and dark period.

Regardless of the appeal's outcome, this case has become a watershed moment in the global pharmaceutical industry's antitrust regulation . This marks the first time a U.S. federal jury has held a pharmaceutical company liable in a private antitrust class-action lawsuit concerning "payment delays," signifying that the U.S. judicial system's scrutiny of reverse payment agreements has formally expanded from administrative oversight to the level of substantial civil damages.

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