Biotech Values

[DewDiligence]

PFE-JNJ redux—>SHPG sues AGN re dry-eye marketing:

https://www.wsj.com/articles/shire-alleges-allergan-blocked-drug-from-medicare-contracts-1506957534

Shire PLC filed an antitrust suit against Allergan PLC, alleging Allergan’s contracts with Medicare Part D drug plans for its Restasis eye drops effectively blocked access to Shire’s rival drug.

The complaint, filed Monday in federal court in Trenton, N.J., says Shire offered steep discounts in bids to secure insurance coverage of the company’s dry-eye drug Xiidra but the Part D plans refused, due to Allergan’s “bundled discounts, exclusive dealing” and other tactics.

…After an administrator of several Part D plans abandoned a tentative agreement to cover Xiidra and decided against putting the drug on the plans’ formularies, the lawsuit says, Shire asked how it could gain coverage. “You don’t,” Shire’s lawsuit quotes an unnamed plan official replying.

Restasis is AGN's second-largest drug (after Botox), but SHPG's Xiidra has been gaining market share in the category.

Medicare Part D plans are run by private insurance companies under contract to CMS.