In late August 2022, Blue Cross and Blue Shield of Vermont and the Vermont Health Plan filed a lawsuit against Teva Pharmaceuticals, alleging that Teva used some unsavory marketing tactics to get patients to use its multiple sclerosis drug, Copaxone.
Teva licensed glatiramer acetate in 1987 and ten years later, began to sell Copaxone in 1997 for $769.15 per month. By 2003, the monthly price of the drug was up to $1,000, and by 2017, the price was up more than $5,800.
According to the lawsuit, Teva made $34 billion between 2002 and 2019 from Copaxone. The lawsuit alleges that part of the reason behind the sales was a marketing tactic whereby Teva allegedly offered consumers coupons to keep them from switching to a lower-priced generic version of the drug. While consumers likely appreciated the coupon (and continued to use Copaxone, as it did not have an impact on their personal bottom line), payers had to pick up the significant cost between what a generic would have cost and what Teva charged for the branded drug.
The lawsuit claims that the company “preyed upon the fundamental disconnect between the entities that pay for prescription medications (employers and insurers who pay claims incurred by health plan members) and the individuals and entities that determine which products are ultimately purchased (doctors, pharmacists, benefit managers, and health plan members).”
In addition to the coupon allegations, BCBS alleges that Teva artificially prolonged Copaxone’s patent exclusivity. “When Copaxone was nearing the end of its patent exclusivity, Teva launched a new 40mg, three-times-a-week formulation to avoid drug substitution laws,” the lawsuit alleges. “Teva, in collusion with pharmacy benefit managers, then resorted to anticompetitive, unfair, and deceptive tactics to coerce and otherwise induce patients and doctors to switch to the new dosage, over which Teva improperly claimed and for some time received extended patent exclusivity.”
The lawsuit further alleges that Teva put pressure on prescribers to write “dispense as written” prescriptions for Copaxone so that pharmacists were not able to suggest a cheaper generic, thereby essentially blocking lower-cost generics from entering the market. This meant that “generic forms of glatiramer acetate were unable to meaningfully compete with Copaxone and Teva was able to maintain and exploit its monopoly in the market for glatiramer acetate, including by charging supercompetitive prices,” the lawsuit states. “This caused health plan payers to unnecessarily expend billions of dollars on Copaxone. But for the anticompetitive conduct of Teva and its co-conspirators, health plan payers would have spent far less on glatiramer acetate, as they would have paid for either more affordably priced Copaxone or lower-cost generics.”
Other Lawsuits
This lawsuit follows a 2019 lawsuit filed by Humana against Teva (and 36 other pharmaceutical companies), accusing the companies of price fixing in the generic market, conspiring to drive up the cost of generic drugs. In that lawsuit, Humana singled Teva out as responsible for the “overarching conspiracy” to leverage a “culture of cronyism in the generic drug industry.”
The State of Connecticut – along with several other state Attorney Generals – also filed a lawsuit in 2019 against Teva and several other drug manufacturers for “unreasonably restraining trade, artificially inflating and maintaining prices and reducing competition in the generic pharmaceutical industry throughout the United States.” That complaint was followed by a separate complaint (joined by 44 states) against 19 generic drug manufacturers, alleging a “broad conspiracy to artificially inflate and manipulate prices, reduce competition, and unreasonably restrain trade for more than 100 different generic drugs.”