Earlier this week Shire (SHPG) sued Allergan (AGN) for allegedly blocking access to its dry-eye drug from certain Medicare Part D drug plans:
Shire SHPG -1.53% PLC filed an antitrust suit against Allergan AGN -0.51% 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.Shire SHPG -1.53% PLC filed an antitrust suit against Allergan AGN -0.51% 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 lawsuit comes as Allergan is under siege from generic drug makers – Teva (TEVA), Mylan (MYL),and Pfizer (PFE) – who want to offer generic Restasis. It is suing them in federal court to block a copycat version of the drug. Allergan also sold its Restasis patents to the Mohawk Indian Tribe in order to avoid an inter partes review (“IPR”) brought on by Mylan. The Shire lawsuit adds another player to the current dry-eye donnybrook.
Restasis represents 9% of its total revenue; according to Bernstein the drug accounts for 15% of its income. In Q2 2017 Restasis and Xiidra had sales of $354 million and $57 million, respectively. Restasis’ revenue was up 10% sequentially; however, it fell 9% Y/Y as Xiidra made its presence felt. Xiidra’s revenue was up 46% sequentially as the product continues its ascent.
