Takeda hit with $885mn damages award in landmark pay-for-delay ruling

Japanese drugmaker faces potential trebled liability of $2.5bn as first federal jury finds pharmaceutical company liable in reverse payment case

Takeda Pharmaceutical (TAK) faces a damages bill that could reach $2.5bn after a federal jury in Boston found the Japanese drugmaker liable in what legal experts are calling a landmark antitrust case, the first time a pharmaceutical company has been found liable by a federal jury in a so-called pay-for-delay suit.

The jury, following a month-long trial at the US District Court in Boston, ruled on Monday that Takeda had conspired with a rival to postpone the market entry of a generic competitor to Amitiza, its treatment for chronic constipation. The $885mn verdict is subject to automatic trebling under US antitrust law, which would lift the total liability to approximately $2.5bn once judgment is formally entered.

The class action, filed in 2021, was brought by a consortium of direct purchasers including pharmacies, health insurance funds and major retailers. Among the plaintiffs are CVS Health (CVS) and Walgreens Boots Alliance (WBA.O), which alleged the arrangement forced them to pay inflated prices for Amitiza over an extended period.

The case centres on a $210mn settlement Takeda and its then-partner Sucampo Pharmaceuticals (SCMP) struck in 2014 with Par Pharmaceutical, a New York-based generics specialist. Plaintiffs argued the agreement constituted an unlawful payment to Par in exchange for delaying the launch of a cheaper generic version of Amitiza until 2021 — a delay that attorneys from Seattle-based law firm Hagens Berman said resulted in "hundreds of millions of dollars in overcharges" to their clients.

Of the total $885mn award, direct purchasers were granted $475mn and individual retailers a collective $347mn. Both sums will be trebled upon formal entry of judgment.

Takeda moved quickly to distance itself from the verdict. In a statement issued shortly after Monday's ruling, the company said it would "vigorously pursue post-trial motions and an appeal," adding that it remained "firm in our conviction that the plaintiffs' case lacks merit." The company also cited what it characterised as "evidentiary and legal errors made during the trial."

The drugmaker has sought to reframe the 2014 settlement as pro-competitive, arguing that the agreement permitted Par to bring its generic to market more than six years before Takeda's patents on Amitiza would otherwise have expired.

Amitiza, originally approved by the US Food and Drug Administration in 2006, generated sales of ¥21.2bn ($191mn) in Takeda's 2020 fiscal year — the first year to include months in which Par's generic was available — a decline of nearly 25 per cent from ¥28.1bn ($253mn) the prior year. Takeda no longer sells the drug following the expiry of its licence agreement with Sucampo.

The verdict cannot be enforced, and the liability figure will not be finalised until the court formally enters judgment. Takeda's appeal is expected to focus on both the legal framework applied to the settlement and the evidentiary standards used during the trial.