Shire sues Allergan in U.S. over dry eye drug

(Reuters) - Allergan Plc was sued on Monday by Shire Plc for allegedly scheming to block doctors from prescribing its new treatment for dry eye disease.

In a complaint filed with the federal court in Newark, New Jersey, Shire accused Allergan of violating antitrust laws to preserve its roughly 90 percent share in Medicare prescription drug plans for its older and “clinically inferior” dry eye drug Restasis, and block prescriptions of Shire’s rival drug Xiidra.

“Quite simply, Allergan has and will continue to use bundled discounts, exclusive dealing, coercion and interference to unlawfully ‘block’ Shire from competing with it, and to maintain its monopoly in the Part D market at all costs,” Shire said, referring to the Medicare drug plans.

The lawsuit follows Allergan’s announcement on Sept. 8 that it transferred its Restasis patents to the Saint Regis Mohawk Tribe in upstate New York, whose sovereign status could limit legal challenges. The Tribe subsequently agreed to license the patents to Allergan.

Four U.S. senators last week called for a probe of whether the unusual move was anti-competitive and intended to keep prices high.

Restasis is Allergan’s largest drug other than Botox, with sales of $1.49 billion in 2016 and $676.4 million in the first six months of 2017, regulatory filings show. Shire has said Xiidra sales totaled $96 million from January to June.

Allergan spokesman Mark Marmur said the lawsuit has no merit, and the company complies with Medicare procedures.

“Competition in the chronic dry eye therapeutic market has driven pricing down for patients and payers in Medicare Part D and commercial plans,” he said in an email. “Restasis continues to provide significant value to Medicare beneficiaries, providers and the Part D program.”

Dry eye occurs when the eye produces tears improperly or with the wrong consistency. Failing to treat it can lead to inflammation, scarring and even vision loss. The condition is often chronic, and affects nearly 16 million U.S. adults.

Allergan and Shire are headquartered in Dublin, Ireland, although Allergan has operations in Parsippany, New Jersey, and Shire in Lexington, Massachusetts.

Shire won U.S. Food and Drug Administration approval in July 2016 for Xiidra, the first dry eye disease drug to win FDA approval since Restasis in 2002.

The chemical name for Restasis is cyclosporine, and for Xiidra it is lifitegrast.

The case is Shire US Inc v Allergan Inc et al, U.S. District Court, District of New Jersey, No. 17-07716.