On June 25, an Illinois federal court dismissed an antitrust class action that alleged that branded drug manufacturer Biogen harmed competition by paying Pharmacy Benefit Managers (“PBMs”) not to promote generic alternatives to its treatment for multiple sclerosis, Tecfidera.  In re Tecfidera Antitrust Litigation, No. 24-cv-7387, 2025 WL 1755725 (N.D. Ill. June 25, 2025).

To reduce pharmaceutical costs, all states have adopted drug substitution laws that allow or require pharmacies to fill prescriptions with generics, even if the branded version is prescribed.  Payors such as health plans generally engage PBMs to help administer their drug benefits, and those PBMs maintain lists of drugs, called formularies, that are sorted into preferential tiers to determine how much plans and patients pay for each prescription drug.  Payors typically can choose from multiple formularies offered by their PBM, which in turn determines the prescription drugs available to their enrollees and the prices paid for those pharmaceuticals.

In In re Tecfidera, plaintiffs sought to represent a class of health plans that alleged that Biogen thwarted state drug substitution laws and foreclosed competition by paying PBMs to favor branded Tecfidera over generic alternatives.  For example, the health plans claimed that Biogen paid rebates and fees to PBMs that placed Tecfidera in the same or better tier as its generics.  The court found, however, that Plaintiffs’ claims on generic market foreclosure fell short.  As noted above, PBMs typically offer multiple different formularies, and the allegations in plaintiffs’ complaint showed that most health plans did not choose formularies that privileged Tecfidera over generics.  The court concluded that: “If plans can, and apparently do, choose formularies lacking the features complained of in Plaintiffs’ allegations, the Court cannot see how generic competition was meaningfully stifled in the market for dimethyl fumarate products to Biogen’s advantage.” In re Tecfidera, 2025 WL 1755725, at *9.

This decision demonstrates how courts closely scrutinize a complaint’s allegations to determine whether it meets the standard for alleging harm to competition under the Sherman Act.  It also provides useful guidance for how manufacturers of branded pharmaceuticals can defend against claims of foreclosure of generic drugs.