JAMP files application under Competition Act alleging abuse of dominance against Janssen

JAMP recently brought an application under the Competition Act alleging abuse of dominance against Janssen in relation to Stelara, Janssen’s drug containing the active ingredient ustekinumab.

Section 79 of the Competition Act empowers the Competition Tribunal to prevent abuses of a dominant market position. In short, where a person substantially or completely controls a class or species of business, the Tribunal can make an order prohibiting anti-competitive acts or conduct that lessens competition. Previously, only the Commissioner of Competition could bring an application for such relief. The Competition Act was amended in 2022 and now permits private parties to apply directly to the Tribunal if they are affected by abuse of dominance practices. However, a party must first obtain leave from the Tribunal to bring such an application. JAMP recently brought an application seeking leave to bring an abuse of dominance application against Janssen.

As set out in its Memorandum of Fact and Law, JAMP alleges that Janssen sells Stelara for more than $4,000 per dose and earned over $2 billion from sales in Canada between 2008 and 2021. JAMP alleges that Janssen has “gamed the pharmaceutical regulatory system and used sham litigation to disincentivize rivals from launching their own ustekinumab drugs.”

Earlier this year, JAMP launched an ustekinumab drug product that is biosimilar to Stelara. JAMP alleges that Janssen “conceived of and implemented a series of inter-connected anti-competitive acts” including:

• the development of a fighting brand (Janssen’s Finlius drug product);
• the misuse of a patient support program;
• the dissemination of deceptive communications to prescribing physicians and health care professionals, patients and insurers;
• predatory pricing; and
• selective and discriminatory responses to a competitor for the purpose of impeding its expansion and eliminating it from a market.

JAMP alleges that Janssen has previously engaged in similar practices but that, due to the recent amendments to the Competition Act, “yesterday’s abusive practices are no longer shielded from legal scrutiny today.”

The Tribunal has not yet ruled on JAMP’s application for leave.

There is a preliminary motion outstanding before Janssen files its responding materials. Janssen brought an informal motion requesting leave to file affidavit evidence as part of its responding materials. The Competition Tribunal Rules require the applicant’s materials to include affidavit evidence setting out the facts supporting the application. However, the Rules provide that the respondent’s materials shall not contain affidavit evidence except with leave of the Tribunal. JAMP filed four affidavits in support of its application for leave.

If the Tribunal grants leave for JAMP to bring its application, JAMP intends to seek an order requiring Janssen to pay an administrative penalty of “three times the value of the benefit derived from the anti-competitive practices, which is at least $1,000,000,000” and prohibiting Janssen from engaging in a wide range of activities, including:

• selling or marketing Finlius (its fighting brand) or any “relabelled biologic” for 10 years;
• licensing the rights to any “relabelled biologic” drug for 10 years; and
• offering a drug that is biosimilar to Stelara through its patient services program for 5 years.

All materials that have been filed with the Competition Tribunal to date are available on its website, here.