Clients praised NERA President Dr. Lawrence Wu for his testimony regarding market power and relevant antitrust markets in In re HIV Antitrust Litigation. He is credited with providing compelling testimony against the narrow antitrust markets advanced by plaintiffs, and Gilead’s alleged market power within them.

In 2019 and 2020, a series of antitrust litigations were brought by consumers, wholesalers, retail pharmacies, and third-party payors such as insurers and health plans against several manufacturers of drugs that treat HIV. Plaintiffs alleged, among other things, that a patent settlement agreement between Gilead and Teva constituted an illegal payment and delayed the market entry of generic versions of Atripla and Truvada, two drugs developed and marketed by Gilead for the treatment of HIV. According to the plaintiffs, the settlement agreement allowed Gilead to obtain and advance its monopoly power in the respective markets for these two HIV treatments, thus raising the price of Atripla and Truvada above competitive levels. As part of their suit, the plaintiffs sought $3.6 billion in damages.

These allegations were tried before the United States District Court for the Northern District of California at a jury trial in May 2023. Dr. Wu led a NERA team retained by the defendants, providing analysis and testimony.

Dr. Wu testified at trial on behalf of Gilead and Teva in response to expert testimony presented by plaintiffs regarding market power and the relevant antitrust markets. The plaintiffs testified that the relevant antitrust market consisted only of the single branded drug at issue and its generic counterpart. In contrast, Dr. Wu opined that the market for each of Gilead’s HIV drugs at issue was broader than simply the brand and its generic. His opinion was grounded in actual patient prescribing data showing that HIV patients regularly switched among branded treatment regimens, particularly as newer treatments were introduced. Indeed, once-popular HIV treatments such as Atripla were eventually supplanted by newer and innovative branded therapies. These patterns were echoed in the HIV Treatment Guidelines published by the US Department of Health and Human Services, which generally recommend newer treatments as they become available. As testified by Dr. Wu, innovation and quality of treatment dominated patient decision-making over price for HIV therapies.

Dr. Wu also opined that Gilead did not have market power in the relevant markets for Atripla and Truvada, as Gilead and its competitors continued to innovate in the face of branded competition from other drug manufacturers. This dynamic led to evolving market boundaries, which in turn affected market power. Moreover, Gilead’s gross profit margins remained within industry norms.

On 30 June 2023, the jury found that the plaintiffs had not shown that Gilead had market power within the relevant markets for Atripla and Truvada. The jury additionally found that the patent settlement agreement between Gilead and Teva did not constitute a “reverse payment” from Gilead to delay Teva’s competing generics. Their findings were consistent with Dr. Wu’s testimony on both issues.