Two subsidiaries of Johnson & Johnson have reached a preliminary $65 million agreement to resolve allegations of anti-competitive behavior. The settlement, filed on Wednesday in the federal court of Maryland, addresses a long-standing proposed class action involving the pulmonary hypertension medication Tracleer. The legal challenge was spearheaded by a group of third-party payors, including the Government Employees Health Association and various health plans, who claimed they were systematically overcharged for the drug due to suppressed market competition.
The core of the litigation, which began in 2018, centered on the business practices of Actelion Pharmaceuticals and Janssen Research & Development. Actelion, which was acquired by Johnson & Johnson in 2017 for approximately $30 billion, had generated significant revenue from Tracleer, a specialized oral treatment for pulmonary artery hypertension. The plaintiffs alleged that the manufacturers engaged in a scheme to delay the entry of more affordable generic versions of the medication. Specifically, the lawsuit contended that the drugmakers restricted competitor access to necessary samples of Tracleer, a maneuver that effectively blocked rivals from conducting the testing required to bring a generic alternative to market for nearly a decade. (Reuters)
While the settlement marks a substantial payout, the defendants have explicitly denied any wrongdoing or liability. In the legal filing, the pharmaceutical units maintained that their actions were not unlawful, suggesting the settlement was a strategic move to conclude the protracted litigation rather than an admission of antitrust violations. Despite this denial, Sharon Robertson, a lead attorney for the plaintiffs, characterized the $65 million fund as “meaningful relief” for the entities that provided reimbursement for the drug and its eventual generic counterparts during the affected period.
The reach of this settlement is extensive, covering Tracleer purchases made across 31 states, the District of Columbia, and Puerto Rico. The timeframe for eligible claims spans nearly nine years, from December 2015 through September 2024. Before any funds are disbursed to the class members, the proposal must receive formal approval from a federal judge. Beyond the direct compensation to health plans, the plaintiffs’ legal team has indicated they will seek approximately $21 million, or roughly 33% of the total settlement fund, to cover attorney fees and related litigation costs.