Sandoz, Liquidia Win $137M in Generic Remodulin Dispute Against United

In a significant legal victory for Sandoz, a New Jersey district court has ruled that the company is entitled to damages for lost profits due to a breach of contract by United Therapeutics. The legal battle centers around a generic version of the drug-device combination for pulmonary arterial hypertension, treprostinil, originally marketed by United Therapeutics under the brand name Remodulin.

The dispute dates back to 2011. Sandoz had filed for FDA approval of its generic version of Remodulin. United Therapeutics responded by filing a patent infringement lawsuit, which eventually led to a settlement in 2015. This settlement granted Sandoz the right to market its generic version starting in 2018. Importantly, United Therapeutics agreed not to take any actions that would "prevent, delay, limit or otherwise restrict" the launch of Sandoz’s generic product.

However, complications arose in 2015 when Smiths Medical ASD, United Therapeutics' device supplier, decided to halt the production of its drug delivery pumps. Smiths Medical later agreed to manufacture additional pumps exclusively for United. Subsequently, Smiths informed United that customers were purchasing large quantities of the cartridges for purposes other than those intended, leading to an agreement requiring Smiths to use "commercially reasonable efforts" to restrict sales to other parties.

When Sandoz prepared to launch its generic, United Therapeutics and Smiths imposed a condition that required United’s approval for every Smiths cartridge sale to specialty pharmacies, ensuring they were used only for Remodulin. This restriction posed a significant hurdle for Sandoz. Despite obtaining more than 3,000 pumps through its partner RareGen (now known as Liquidia after a 2020 merger), Sandoz was unable to procure the necessary cartridges. Efforts to negotiate with Smiths Medical for licensing the cartridges failed, prompting Sandoz and Liquidia to seek alternative solutions. Eventually, they found compatible cartridges, which received FDA clearance in 2021.

In 2019, Sandoz filed a complaint against United Therapeutics and Smiths Medical, accusing them of trade restraint and monopolization, seeking damages for the profits lost due to the unavailability of cartridges. Over the course of litigation, Sandoz and Smiths reached a settlement, but United Therapeutics continued to contest the charges.

Earlier this year, the United States District Court for the District of New Jersey sided with Sandoz. Judge Brian Martinotti concluded that the lost profits following Sandoz’s launch were a direct result of United’s breach of the 2015 settlement agreement. The court determined that Sandoz was entitled to $137 million in damages. However, this amount is subject to reduction to account for the saved cost of Liquidia’s profit share. The final amount will be calculated considering the actual profits realized from Sandoz’s intravenous-only launch. The proceeds from the litigation will be split evenly between Liquidia and Sandoz, although Liquidia will not retain any net proceeds due to pre-existing litigation finance agreements.

In parallel, United Therapeutics and Liquidia are engaged in another legal conflict over Liquidia’s proposed generic version of United’s inhalation powder treprostinil, Tyvaso DPI. United Therapeutics has sued the FDA over its approval process for Liquidia’s Yutrepia and has also filed a lawsuit against Liquidia over a recently acquired patent. Although a Delaware judge lifted an injunction preventing the FDA from approving Yutrepia, the FDA has deferred full approval until United’s market exclusivity expires in May 2025.