AMGEN USED ANTICOMPETITIVE SALES PRACTICES, J&J CLAIMS

Johnson & Johnson (J&J) recently filed an antitrust lawsuit in federal court accusing rival manufacturer Amgen of engaging in anticompetitive practices to monopolize the market for sales of anti-anemia drugs to oncology clinics.

The lawsuit, filed by J&J subsidiary Ortho Biotech Products, alleges that Amgen has implemented an anticompetitive "tying" arrangement and pricing scheme that forces cancer clinics to purchase its red blood cell growth factor (RBCGF) drug, Aranesp (darbepoetin alfa), at the expense of Ortho's competing drug Procrit (epoetin alpha).

Under Amgen's pricing scheme, oncology clinics that purchase substantial amounts of Aranesp receive sharp discounts on purchases of the company's white blood cell growth factor (WBCGF) drugs, Neulasta (pegfilgrastim) and Neupogen (filgrastim), which currently dominate the market. Neulasta and Neupogen currently account for 98 percent of WBCGF drug sales to cancer clinics, Ortho states in its complaint. J&J does not sell WBCGF drugs.

According to Ortho, Amgen's pricing scheme became considerably more "coercive" on Oct. 1. At that time, Amgen "imposed even steeper pricing penalties on Amgen's monopoly WBCGF drugs when oncology clinics do not purchase up to 75 percent of their RBCGF drugs from Amgen. In fact, if a clinic wishes to continue to receive the same level of rebates it had been receiving under the pre-Oct. 1, 2005, contract, the clinic must increase its Aranesp share up to 90 percent," states Ortho's complaint, which was filed in the U.S. District Court for the District of New Jersey.

Amgen's tactics have been extremely successful in increasing sales of Aranesp, according to Ortho. Aranesp now accounts for roughly 66 percent of RBCGF drug sales to cancer clinics, an increase of 46 percent over the past 18 months, the complaint states. Procrit, meanwhile, has seen its market share in oncology clinics plummet to 34 percent, from 55 percent in the first quarter of 2004.

In addition to eroding Procrit's market share, Amgen's sales practices are causing irreparable harm to public health, Ortho alleges. "Eliminating Ortho as an effective competitor in the oncology clinic market will also result in less physician choice," the complaint states. "Physicians and patients should not be effectively cut off from access to the benefits of Procrit, which many physicians would prefer to Aranesp.