United Therapeutics, a Maryland biotechnology company founded by a former satellite broadcasting executive to develop a treatment for her daughter’s rare disease, is the target of a lawsuit alleging that it unfairly thwarted generic competition.
The suit was filed by Sandoz, a division of Novartis. Sandoz has U.S. approval for a generic version of the United Therapeutics drug Remodulin, which costs up to $144,000 a year. The Food and Drug Administration approved Remodulin in 2002 to treat a rare cardiovascular disorder called pulmonary arterial hypertension (PAH).
But Sandoz, which officially launched its generic version last month, says it cannot get its lower-cost therapy into the hands of patients because of unfair, anticompetitive tactics by United Therapeutics. Sandoz says its drug will be priced 10 percent less than the branded therapy, which is the typical U.S. discount when a first generic enters a market.
The drug must be administered via a wearable, electronic pump that trickles a continuous dose into the patient’s body; United Therapeutics reached an exclusive arrangement with the only maker of the pumps, Smiths Medical, that dictates that only brand-name Remodulin can be can be used in the system, according to the suit.
The suit alleges United Therapeutics took another step in a “secret agreement’’ to safeguard its brand drug from competition: It bought all of Smiths’ dose cartridges that go into the pump.
“The anticompetitive restrictions imposed by defendants have no public benefit or medical justification — they merely protect United Therapeutics’ bottom line,’’ says the suit, filed Wednesday by Sandoz and a marketing partner, RareGen. “Defendants have cornered the market.’’
The lawsuit alleges antitrust violations, based on what it calls United Therapeutics’ moves to prevent competition from entering the market. It also names Smiths as a defendant.
Remodulin is United Therapeutics’ biggest-selling drug, with $600 million in revenue in 2018. United Therapeutics said in a news release Thursday that the Sandoz lawsuit is meritless. It said Sandoz is to blame for its own problem because it failed to lock down a delivery system for its generic drug.
It said it made arrangements with Smiths in 2015 to make sure that PAH patients would have access to Remodulin.
“Absent United Therapeutics taking this action, thousands of very sick PAH patients may not have been able to access necessary therapy,’’ the company said. “Sandoz and RareGen now seek to make us responsible for their failure to properly plan to serve their prospective patients.’’
Smiths Medical also denied the allegations. It said it offered Sandoz alternative solutions as well as a license to produce cartridges.
“Rather than proceeding with an amicable business resolution to its problem, Sandoz chose to initiate litigation, in an attempt to shade the truth and spin the facts,’’ Smiths spokesman Keith Hoof said in a statement.
United Therapeutics was launched in 1996 by chief executive Martine Rothblatt, a founder of Sirius XM radio, after her daughter was diagnosed with PAH. Rothblatt is something of a renaissance figure in the world of drug executives, a transgender woman with eclectic interests, a bent for philosophizing and religion, and an interest in growing transplantable organs in animals. United Therapeutics has a subsidiary, Lung Biotechnology PBC, that is working on technology to improve the supply of lungs for transplant.
But United Therapeutics has not been immune to the problems facing many biotech and drug companies, including the threat of generic competition and trouble related to high brand prices.
In 2017 it settled a Justice Department probe for $210 million after being accused of channeling payments through a charitable foundation to help Medicare patients make co-payments for its drugs.
This month, its stock price dropped 16 percent after it stopped late-stage clinical trials for a potential new drug for PAH.