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Eli Lilly fined in BRL 36.6 million for sham litigation

Condemnation

The company omitted information about the administrative process in the National Institute of Industrial Property (INPI in its acronym in Portuguese), and a series of relevant information about the change of scope in the patent request.
published: Jun 25, 2015 10:00 AM last modified: Apr 08, 2016 10:40 AM

The Tribunal of the Administrative Council for Economic Defense – CADE condemned, in its public hearing on 24 June 2015, the companies Eli Lilly do Brasil Ltda. and Eli Lilly & Co. for the practice internationally known as sham litigation (Administrative Proceeding no. 08012.011508/2007-91). The fine imposed sum BRL 36.6 million.

By means of contradictory and misleading law suits filed in the Federal Courts of Rio de Janeiro, the Federal District and São Paulo, the company gained the exclusive rights to trade the medicine Gemzar, which active principle is the gemcitabine hydrochloride, used in cancer treatment.

By analyzing the judicial actions filed by Eli Lilly, CADE concluded that the company omitted a series of relevant information about the change of scope in the patent request, which was initially related exclusively to the active principle production process. The company also omitted information about the administrative process in the National Institute of Industrial Property (INPI in its acronym in Portuguese).

In this sense, the company obtained the temporary monopoly of the product in July 2007, when the Regional Federal Court (TRF in its acronym in Portuguese) of the 1st Region ruled that the National Health Surveillance Agency (ANVISA in its acronym in Portuguese) should not authorize other competitors to sale medicines similar to Gemzar for breast cancer treatment. The monopolistic protection remained in effect until March 2008, when the Superior Court of Justice understood that upholding the interlocutory injunction would cause serious harm to public health and economy.

“The respondent practiced sham litigation by filing a law suit against ANVISA in order to obtain the exclusive rights over the sales of Gemzar, being aware that the patent request was exclusively related to its production process. The company also did not inform the judge of the Federal District that the amendment to the original request had been denied in the law suit filed in Rio de Janeiro”, explained the Reporting Commissioner Ana Frazão.

CADE also concluded that Eli Lilly infringed the competition law by trying to unfairly extend the effects of the right of exclusivity to other therapeutic purposes not covered by decision of the TRF of the 1st Region, which was restricted to breast cancer treatment.

Damages – For CADE’s Tribunal, by obtaining the undue monopoly of the gemcitabine hydrochloride based on a judicial decision that was favorable due to strategies that involved the omission of relevant data, Eli Lilly’s conduct produced serious damages to competition.

From July 2007 to March 2008, the period in which the company held the monopoly of the active principle, its competitors were kept out of the market. Furthermore, during three months within that period, Sandoz was also forbidden to sell the Gemcit medicine, used for the treatment of any type of cancer, even though Eli Lilly’s monopoly was only related to the marketing of medicines used for treating breast cancer.

During the monopoly, Eli Lilly abused its dominant position. In a bid promoted within the period, in which Sandoz was forbidden to trade the Gemsit medicine, the charged price for Gemzar was BRL 540. After the preliminary injunction that prohibited other competitors to sell the product was revoked, the price fell to BRL 189.