Takeda, Par, Watson, Amneal Conspired to Suppress Competition for Generic Gout Treatment, Class Action Claims

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Another proposed class action alleges Takeda and Par Pharmaceuticals have conspired to suppress competition in the generic drug market, this time for Colcrys (colchicine), an FDA-approved treatment for gout flares and familial Mediterranean fever. 

The 27-page lawsuit alleges that although Par and co-defendants Watson Laboratories and Amneal Pharmaceuticals were set to begin competing with one another in 2015 in the market for 0.6 mg colchicine tablets, over which Takeda “enjoyed a monopoly” with the brand Colcrys, the four companies instead “agreed it would be more profitable to conspire not to do so.” According to the filing, the defendants, “masquerad[ing]” as a joint venture, agreed that Par would sell Takeda’s product instead of its own so as to maintain Takeda’s monopoly, restrict Par’s output of a competing product, allocate 100 percent of the market to Takeda for several years and share with Takeda the corresponding monopoly prices, “all at the expense of purchasers and patients.” 

The lawsuit alleges the other spokes of the defendants’ conspiracy saw Takeda, Par, Watson and Amneal agree: 

• To have Par restrict its output of generic Colcrys and instead become a joint venture partner of Takeda and distribute its “authorized generic” in place of Prasco LLC, who had done so since early 2015;
• That Par would not replace Prasco until two and a half years following the inception of the alleged conspiracy so as to lengthen the period of time that Colcrys and Takeda’s “authorized generic” could be sold free from competition;
• That Par would pay a large royalty to Takeda on “authorized generic” sales and keep the prices at which it would sell Takeda’s “authorized generic” at or slightly below the price at which Colcrys was being sold;
• That Watson and Amneal would restrict their output of generic Colcrys “for several years,” after which each would enjoy a defined period of time in which to sell their respective generics free from competition from all other would-be generic Colcrys makers; and
• To allow Takeda to enter into licenses with the generic makers that would delay their entry beyond Watson’s and Amneal’s agreed periods of competition-free sales, thereby providing the co-conspirators “long periods of supacompetitive Colcrys profits.” 

The suit alleges the conspiracy to contain generic Colcrys output worked as planned from November 24, 2015 to November 25, 2019. 

“First Takeda alone, and then Takeda and Par together, earned shared and supracompetitive profits from the sale of Takeda’s branded and ‘authorized generic’ Colcrys,” the complaint reads. “Watson and Amneal withheld their output from the market in anticipation of their defined periods of exclusive generic sales, as agreed. Competition was severely harmed.” 

By the end of November 2019, however, the conspiracy’s goals were not fully realized, the suit says. On November 25, Mylan Pharmaceuticals launched its generic version of Colcrys, which in turn allowed other generics to be released and thereby interfere with the defendants’ plans, according to the lawsuit. Although Colcrys prices quickly fell to levels palatable for consumers upon Mylan’s generic entry into the market, prices would have come down much sooner absent Takeda, Par, Watson and Amneal’s conspiracy, the case claims. 

“Instead, consumers and direct purchasers paid prices for Colcrys that were approximately 1,200% higher than they should have been over that time,” the suit contends. 

The case looks to represent all persons or entities in the U.S. and its territories who directly purchased branded or generic Colcrys tablets from Takeda, Prasco or Par at any time since July 29, 2016. 

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