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Home>Shire Alleges Allergan Blocked Drug From Medicare Contracts -- Update

Shire Alleges Allergan Blocked Drug From Medicare Contracts -- Update

Shire Alleges Allergan Blocked Drug From Medicare Contracts -- Update

10/02/2017

 By Jonathan D. Rockoff 

Shire PLC filed an antitrust suit against Allergan PLC, alleging Allergan's contracts with Medicare Part D drug plans for its Restasis eye drops effectively blocked access to Shire's rival drug.

The complaint, filed Monday in federal court in Newark, N.J., says Shire offered steep discounts in bids to secure insurance coverage of the company's dry-eye drug Xiidra but the Part D plans refused, due to Allergan's "bundled discounts, exclusive dealing" and other tactics.

"There was not a level playing field for us to compete" in Part D, John Neeley, Shire's head of U.S. pricing and market access, said in an interview. Some 13% of Part D patients have access to Xiidra on their drug formularies, compared with about 88% of commercially insured patients, a Shire spokeswoman says.

Allergan said there is "no merit" to the lawsuit. "In our negotiations with Medicare Part D sponsors, we are competing on value and price, and competition in the chronic dry-eye therapeutic market has driven pricing down for patients and payers in Medicare Part D and commercial plans," Allergan said.

Shire's lawsuit is the second in the past few weeks to take aim at the closely guarded contracts between drugmakers and health insurers and pharmacy-benefit managers that play an important but hidden role determining which drugs patients can get and will sell well.

In September, Pfizer Inc. filed such a suit alleging Johnson & Johnson used "exclusionary contracts" to shield its arthritis drug Remicade from Pfizer's biosimilar. J&J has said the lawsuit lacked merit and the biosimilar competition was already driving down costs.

The lawsuits reflect just how influential the contracts between drug companies and drug-benefit managers have become in the commercial success of prescription medicines at a time when health plans are trying to control costs.

In the name of limiting spending, drug-benefit managers have been securing steep discounts with one drug company in exchange for restricting access to another company's product. The recent lawsuits are exploring the legality of these increasingly common contracts.

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