Drugs Medical Pharma

Israel’s Teva Pharmaceuticals sue Corcept, Optime over drug monoploy

Israel’s Teva Pharmaceuticals has sued US-based Corcept Therapeutics and Optime Care Inc., a specialty pharma, for monopolising the market for a drug used to treat a rare hormonal disorder.

 HQ Team

June 14, 2024: Israel’s Teva Pharmaceuticals has sued US-based Corcept Therapeutics and Optime Care Inc., a specialty pharma, for monopolising the market for a drug used to treat a rare hormonal disorder.

Treva dragged Corcept to a federal court in San Francisco for “highly damaging antitrust violations that have thwarted Teva’s ability to compete with Corcept’s,” mifepristone-based Korlym, used in Cushing’s syndrome.

The Menlo Park-based Teva stated that the move has deprived vulnerable patients access to lower-cost generic treatments for the debilitating disease.

Korlym was the only FDA-approved treatment for endogenous Cushing’s syndrome. 

“Korlym is a once-a-day pill that is extremely cheap to produce, but Corcept has taken advantage of its lone position in the market to charge supra-competitive prices—several hundred thousand dollars or more for a year’s supply—in the decade-plus that Corcept has enjoyed monopoly power,” the plaintiffs argued.

ANDA in 2017

Teva sought to break Corcept’s monopoly in 2017 when Teva filed an Abbreviated New Drug Application (ANDA) seeking FDA approval to bring a more affordable generic version of Korlym to the market.  

“In the years since Teva filed its generic Korlym ANDA, and continuing to this day, Corcept and Optime have engaged in a multifaceted scheme to prolong Corcept’s monopoly by stifling competition from Teva at every turn.”

Optime is a speciality pharmacy that distributes Corcept’s only product and is contractually forbidden from distributing any competing products.

Corcept’s Securities and Exchange Commission filings confirm that its exclusive arrangement with Optime is a “long-term, perpetually-renewing agreement that expressly forbids Optime from working with Corcept’s competitors.”

“Optime is not free to terminate this arrangement even if a company like Teva offers it a better deal.”

‘Bribes, kickbacks’

Teva alleged that Corcept had further entrenched its monopoly by paying “physicians illicit bribes and kickbacks” to induce them to prescribe brand Korlym, despite the availability of Teva’s lower-priced generic.

A patient on Korlym could pay up to $980,000 for his or her prescription at the highest recommended dose. Corcept reported that its “cost of sales”—which includes the cost of manufacturing Korlym, among other things—was just 1.3% of Corcept’s total revenue for each of the years 2023 and 2022.

“Given that 100% of Corcept’s revenue derives from sales of Korlym, it is apparent that Corcept’s profit margins for Korlym are equal to 98.7% at minimum.  Put another way, Corcept has been able to price Korlym at nearly 77 times the marginal cost of manufacturing it.”

Cushing’s syndrome is a rare, debilitating disease affecting approximately 20,000 patients in the US. It has a direct, severe impact on quality of life.  The tumours in both adrenal and pituitary glands result in excess cortisol production leading to syndrome. 

Its symptoms include abnormal weight gain, a fatty hump between the shoulders, wide purple stretch marks, increased fat around the base of the neck, weak muscles, and easy bruising, among other things. 

Generic market

Corcept launched Korlym in 2012.  Corcept’s orphan drug status was set to expire on February 17, 2019, seven years after Korlym received FDA approval. 

Korlym provides Corcept with 100% of its revenue. Teva’s application was the first ANDA to seek approval for a generic version of Korlym.

It was approved by the FDA in 2018. Corcept had sued Teva in a New Jersey federal court the same year for allegedly infringing on Korlym patents. A judge ruled in favour of Teva last year, and Corcept has appealed.

The plaintiff’s lawyers stated that US laws in certain circumstances grant the first generic entrant the exclusive right to sell a generic version (alongside the brand drug) for 180 days.  

A first generic nearly always captures a large market share and drives down prices immediately upon entering the market.  The resulting competition tends to dramatically reduce drug prices, saving health insurers and patients billions of dollars across the market every year.

“Despite being the only generic on the market for approximately five months, and being priced at a material discount to Corcept’s branded product for that entire time, Teva has captured virtually no market share.”

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