Patents are a tricky topic. They take years to acquire; they expire eventually; and even after they are acquired, they can be declared invalid. The last two points are the concern of this class action against Janssen Biotech, Inc., two other Janssen companies, and partner BTG International Limited. The complaint argues that when the patent on their very lucrative drug Zytiga expired, the companies kept generic competitors at bay with an invalid patent, thus requiring consumers and insurers to pay more for the drug than they would have if generics had been allowed on the market.
The class for this action is all persons and entities in the Indirect Purchaser states and territories who indirectly purchased, paid for, or reimbursed for Zytiga, not for resale, between December 13, 2016 until the anticompetitive effects of the companies’ conduct ends.
Janssen received a patent on the compound that made up the drug Zytiga in 1997 and got approval in 2011 for the use Zytiga in combination with prednisone to treat prostate cancer. Zytiga made the companies billions of dollars.
The patent would expire in December 2016, however, letting the makers of generics and biosimilars market their own versions. To extend their period of exclusivity, years before the expiration date, Janssen put in an application for a second patent.
The second one was for the use of Zytiga in combination with prednisone to treat prostate cancer—but that was a problem in several ways, the complaint says:
Obvious ideas cannot be patented, and the above points nearly kept Janssen from obtaining a patent. However, Janssen used a “commercial success” argument: If the combination was truly obvious, others would already have been using it to treat prostate cancer. Thus Zytiga’s great success proved the idea was not obvious. Janssen was granted its second patent.
However, there is a flaw in this argument, the complaint says: No similar drug could be offered at the time for use with prednisone because Janssen held the patent on it. The idea was in fact obvious, but it was blocked by the original patent. Eventually, the Patent Trial and Appeals Board did invalidate the patent on this basis.
The complaint contends that the companies knew this patent would not stand up to scrutiny in court, but because bringing such cases is expensive and time-consuming, it would buy the companies more time for their monopoly. Zytiga was earning a billion dollars a year. It is that additional year or so, when the original patent had expired but the second patent still restrained competitors, that the complaint takes issue with, under the Sherman and Clayton Acts.