Legal Turmoil in the Pharmaceutical Industry: AbbVie, Purdue, and Beyond

Editor’s Note: In a legal confrontation that could significantly impact the pharmaceutical industry, AbbVie has petitioned the U.S. Supreme Court to shield its corporate records from disclosure, challenging a lower court decision that threatens the integrity of attorney-client privilege. This case, alongside ongoing legal battles involving Purdue Pharma and other major pharmaceutical entities, underscores the intricate and often contentious relationship between corporate practices, regulatory oversight, and legal accountability. The outcomes of these cases hold profound implications for cybersecurity, information governance, and eDiscovery professionals, emphasizing the critical importance of safeguarding sensitive communications and maintaining robust compliance frameworks.

Industry News – Antitrust Beat

Legal Turmoil in the Pharmaceutical Industry: AbbVie, Purdue, and Beyond

ComplexDiscovery Staff

In a seminal case that could send ripples through the pharmaceutical industry, AbbVie (ABBV.N) has petitioned the U.S. Supreme Court to protect its corporate records from disclosure, citing a lower court ruling that challenges the sanctity of attorney-client privilege. AbbVie, the Illinois-based pharmaceutical giant known for its testosterone replacement drug AndroGel, faces allegations from drug wholesalers, including AmerisourceBergen and McKesson, who claim they were overcharged due to a meritless patent lawsuit filed by AbbVie in 2011 against Perrigo (PRGO.N).

The controversy centers around the 3rd U.S. Circuit Court of Appeals’ February decision that deemed AbbVie’s patent litigation against Perrigo a “sham.” This ruling invoked the crime-fraud exception, compelling AbbVie to hand over 19 highly confidential documents. AbbVie vehemently denies wrongdoing and argues that the decision sets a dangerous precedent that could undermine attorney-client privilege across the board.

“The 3rd Circuit’s decision greatly expanded the crime-fraud exception, creating a conflict with the Federal Circuit,” AbbVie asserted in its plea to the Supreme Court. The company warns that this ruling incentivizes plaintiffs to file antitrust lawsuits with the hope of accessing sensitive internal lawyer-client communications, potentially weaponizing the judicial system against corporations.

Meanwhile, Purdue Pharma’s legal woes continue to unfold. The company, infamous for its role in the opioid crisis through its aggressive marketing of OxyContin, finds itself in a precarious position after the U.S. Supreme Court nullified its previous bankruptcy settlement. This settlement would have shielded the Sackler family, Purdue’s wealthy owners, from future civil lawsuits in exchange for a $6 billion payout to opioid crisis victims.

Purdue, currently engaged in renewed settlement negotiations, faces increased pressure from a court-appointed committee of creditors. This committee, which includes individuals harmed by the opioid crisis and various insurers and companies with opioid claims, has sought permission from a bankruptcy court in White Plains, New York, to sue the Sacklers. They argue that the family should not escape accountability for their substantial role in fueling the opioid epidemic.

The creditors’ committee underscores its commitment to mediation but insists on the right to pursue litigation if talks fail. “Justice for Purdue’s victims—already far too long delayed—should not be denied for one additional day longer than is necessary,” the committee stressed in a recent court filing. Purdue, which pleaded guilty to federal charges related to OxyContin marketing practices in 2007 and 2020, supports the committee’s stance, emphasizing the need for a swift resolution to avoid protracted legal battles.

Adding to the legal drama, the pharmaceutical industry faces challenges in Mississippi, where U.S. District Judge Halil Ozerden recently upheld a state law mandating drugmakers to offer discounts on drugs dispensed by third-party pharmacies participating in the federal 340B program. PhRMA, the nation’s leading drug industry group, and Novartis (NOVN.S), both challenged the law, arguing it conflicts with federal regulations under the 340B program, which assists low-income patients.

Judge Ozerden dismissed these challenges, suggesting the law aligns with Section 340B’s objective of ensuring accessible medications for underserved populations. Novartis, however, remains defiant and plans to appeal the decision. This case adds to the growing legal entanglements for pharmaceutical companies, as multiple states, including Maryland and West Virginia, have passed similar laws.

In another significant development, the Federal Trade Commission (FTC) has intensified its scrutiny of patent listings in the Orange Book, a federal registry maintained by pharmaceutical companies. Teva Pharmaceuticals is one of the primary targets, accused of manipulating patent listings to deter generic competition. The FTC’s recent demand for internal communications, analyses, and financial data from Teva underscores the agency’s determination to dismantle what it considers a systemic abuse of patent protections.

These unfolding legal battles underscore a turbulent period for the pharmaceutical industry, highlighting the intricate interplay between regulatory oversight, corporate strategy, and accountability. As companies like AbbVie and Purdue navigate the complex legal landscape, the outcomes of these cases will undoubtedly shape the industry’s future dynamics.

News Sources

• Sackler Family Risks Litigation After Supreme Court Rejects Purdue Pharma Settlement
• CMS moves to patch $3 billion fraud problem
• Judge won’t block Mississippi law on discounts for hospitals’ contract pharmacies
• AbbVie asks US Supreme Court to weigh protections for attorney records
• Purdue creditors seek approval to sue Sackler family members

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Source: ComplexDiscovery OÜ