AETNA INC VS GILEAD SCIENCES, INC

This is an antitrust lawsuit brought by health insurance provider Aetna alleging that an anticompetitive agreement between Gilead and competing manufacturer Teva Pharmaceuticals USA, Inc. (Teva) constitutes “an unlawful contract, combination and restraint of trade in the markets for certain HIV cART regimen drugs in violation of California’s Cartwright Act (Cal. Bus. & Prof. Code §§ 16700, et seq.) and various states’ laws.” (TAC, ¶ 8.)

Aetna provides the following as background for the lawsuit:

- “Gilead manufactures three of the four best-selling HIV drugs on the market, as well as many other drugs that are used in HIV combination antiretroviral therapy (‘cART’)” (TAC, ¶ 2);

- “Modern cART therapies often combine two antiretrovirals called nucleoside reverse transcriptase inhibitors (‘NRTIs’), or ‘backbone’ drugs, with at least one antiretroviral of another class, called a ‘third agent.’ These components can be combined into a single pill, known as a ‘fixed-dose combination’ (‘FDC’), which contains all or some of the components of the complete regimen” (TAC, ¶ 3);

- “Since 2004, Gilead has marketed and sold Truvada. Truvada is a ‘backbone’ drug used in modern cART therapies” (Id. at ¶ 4);

- “Gilead also markets and sells Atripla, a fixed-dose combination treatment drug containing Truvada and a third agent” (TAC, ¶ 5);

- “Gilead’s ability to sustain supracompetitive profits in its multi-billion-dollar HIV treatment franchise has been greatly facilitated by an anticompetitive agreement it executed in 2014 with Teva Pharmaceuticals USA, Inc. (‘Teva’), a competing generic manufacturer. Pursuant to the terms of this agreement, Teva delayed entering the market with competing generic versions of Truvada and Atripla for at least two years. In exchange, Gilead contractually provided Teva with six months of exclusivity from generic competition” (TAC, ¶ 6);

- “This anticompetitive agreement insulated Gilead’s products Truvada and Atripla from the drastic price erosion that would have occurred with effective competition, and resulted in billions of dollars in annual excess profits that accrued (and continue to accrue) to Gilead and its co-conspirator Teva” (TAC, ¶ 7).

Aetna alleges three markets over which Gilead has control, the following two of which are relevant here:

June 16, 2026 Law and Motion Calendar PAGE 4 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ - “Truvada and its AB-rated generic equivalents and Atripla and its AB-rated generic equivalents” (TAC, ¶ 134);

- “Alternatively, and separately from the markets for Truvada, Atripla, and their AB-rated generic equivalents, a broader relevant product market exists that is composed of cART drugs used as the foundation for HIV treatment between 2014 and 2020 (the ‘HIV Treatment Regimen Market’), including but not limited to Truvada, Atripla, Biktarvy, Genvoya, Triumeq, and such drug’s AB-rated generics, but excluding standalone ‘third agent’ drugs that may be added to a combination of two NRTIs to form a complete HIV treatment regimen” (TAC, ¶ 135);

Aetna alleges that “[a]t all times relevant to this action, Gilead charged and maintained supracompetitive prices for Truvada and Atripla—i.e., prices were and are markedly higher than those Gilead could have charged if there had been AB-rated competition for these drugs.” (TAC, ¶ 138.) Aetna further alleges that “[d]ue to its use, varying ability to treat the conditions for which it is prescribed, and its side-effects profile, each of the brand drugs is differentiated from all drug products other than AB-rated generic versions.” (Id. at ¶ 140.)

Aetna alleges indirect evidence of Gilead’s market power, stating in the relevant time period, Gilead had 100% of the market for Truvada and Atripla and their AB-rated generic equivalents and more than 70% of the HIV Treatment Regiment Market. (TAC, ¶ 148.) Aetna alleges that this power was “protected by high barriers to entry with respect to the above-defined relevant markets due to patent protections, the high cost of entry and expansion, expenditures in marketing and physician detailing, and state statutes that require prescriptions for the purchase of the products at issue and restrict pharmacists’ ability to swap in other drugs.” (Id. at ¶ 149.)

Aetna alleges that “[t]he existence of other drug products that may be used to treat similar indications as Truvada and Atripla has not constrained Gilead’s ability to raise or maintain prices of Truvada and Atripla without losing substantial sales,” and “[a]lternatively, even if one considers Truvada and Atripla to be part of a broader market comprising HIV treatment regimens, Gilead maintained a dominant share of the HIV Treatment Market and used that dominance to preserve and extend its market power.” (Id. at ¶¶ 150-151.)

Each market corresponds to a theory raised in Aetna’s TAC. The single-product markets correspond to Gilead’s alleged pay-for-delay agreement with Teva with regard to Truvada and Atripla (TAC, ¶¶ 92-126) and the HIV Treatment Regimen market corresponds to Gilead’s alleged strategy to switch to a new type of NRTI to extend its market power once generic products entered the market (Id. at 127-128). Aetna provides further information regarding this second strategy at TAC, ¶¶ 76-77, explaining that “shortly after receiving FDA approval for Viread, Gilead began developing a different tenofovir prodrug called tenofovir alafenamide (‘TAF’)” and that “[b]y having patients switch from TDF-based drugs to TAF-based ones, the patents for which expired much later than those covering Truvada and Atripla, Gilead understood that it could add many additional years of market exclusivity to its tenofovir product franchise.

Gilead also understood that the best time in which to effectuate that switch from TDF to TAF was before cheap generic versions of its popular TDF products hit the market.” (Ibid.)

June 16, 2026 Law and Motion Calendar PAGE 5 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ Aetna states that its expert economist identified the “HIV Treatment Regimen” market based on his analysis of “Gilead documents (1) forecasting generic competition to its HIV drugs and (2) analyzing actual pricing and sales data following generic entry.” (Opp., p. 3:11-22.) As Aetna explains in its opposition, its expert “took note of evidence that Gilead’s conduct was aimed not just at extending its power in the markets for Truvada and Atripla, but prolonging its hold over a broader swath of the HIV market by converting patients to a new line of TAF-based drugs.” (Id. at p. 11:19-21.)

Accepting as true Gilead’s argument that the allegations about the two markets are contradictory, at the pleading stage, plaintiff can allege inconsistent facts:

A plaintiff may plead inconsistent causes of action. (Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Cal.App.5th 1207, 1224, 212 Cal.Rptr.3d 216.) “When a pleader is in doubt about what actually occurred or what can be established by the evidence, the modern practice allows that party to plead in the alternative and make inconsistent allegations.” (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1402, 45 Cal.Rptr.3d 525.) This doubt can arise when plaintiffs are certain of their legal rights but unsure about some of the ultimate facts or when plaintiffs are reasonably certain of the facts but are unsure about their legal rights. (See Gutirrez v.

Southern Pacific Co. (1959) 174 Cal.App.2d 866, 873, 345 P.2d 326.) To accommodate these uncertainties, plaintiffs can generally plead “alternative factual allegations relying on alternative legal theories.” (Williams v. Southern California Gas Co. (2009) 176 Cal.App.4th 591, 598, 98 Cal.Rptr.3d 258.)

Given that alternative legal theories may be pled, “it is not proper for the judge to force upon the plaintiff an election between those causes which he has a right to plead.” (Tanforan v. Tanforan (1916) 173 Cal. 270, 274, 159 P. 709.) “Plaintiff is entitled to introduce his evidence upon each and all of these causes of action, and the election, or in other words the decision as to which of them is sustained, is, after the taking of all the evidence, a matter for the judge or the jury.” (Ibid.)

However, where the plaintiff has not made an election, it is “the duty of the trial court ..., upon the close of the evidence, to decide which of the antagonistic causes of action ha[ve] been sustained, and in so deciding the court [i]s required to take as true the averments in the complaint which bore most strongly against the pleader, and which were sustained by proofs either in the form of evidence or admissions of the pleadings.” (Beatty v. Pacific States Savings & Loan Co. (1935) 4 Cal.App.2d 692, 697, 41 P.2d 378.) If the judgment is based on irreconcilable contradictory findings, the judgment must be reversed. (Id. at p. 699, 41 P.2d 378.)

(Batta v. Hunt (2024) 106 Cal.App.5th 295, 304 [discussing contradictory forms of easements]; The Travelers Indemnity Co. of Connecticut v. Navigators Specialty Ins. Co. (2021) 70 Cal.App.5th 341, 360, fn. 15 (Travelers) [modern rules of pleading allow alternative theories based upon contradictory facts in unverified complaint]; 4 Witkin, Cal. Proc. 6th Plead § 422 (2026).)

June 16, 2026 Law and Motion Calendar PAGE 6 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________

The authorities cited by Gilead do not compel a different result. Gilead at page 18 of its brief points to language in Morrison v. Viacom, Inc. (1998) 66 Cal.App.4th 534, where the Court of Appeal found plaintiffs “failed to allege any facts which, if proven would establish that there was any actual effect on competition in the tiered product market for local broadcast television” and that the facts that they alleged were inconsistent with establishing this effect (Id. at p. 542.) Gilead argues that the same analysis applies here, but in this case, Aetna has now alleged two alternative theories, one depending on the single brand market and this new market where Truvada and Atripla compete.

The California Practice Guide: Civil Procedure Before Trial, cited by Gilead at pages 5 and 7 of the reply brief, is more nuanced than the argument Gilead makes. Inconsistent facts may make a complaint uncertain and subject to demurrer on that basis or they could fail to state a cause of action and thus be subject to a general demurrer. (Cal. Prac. Guide Civ. Pro. Before Trial, §§ 6:242 et seq. (TRG June 2026 update). In this case, Gilead does not claim that the TAC is uncertain or that Aetna has not stated a cause of action for each market, but only that both claims cannot be true because they are contradictory.

The Guide cites to older law, The Guide discusses older law about inconsistent facts (id., § 6:2460 [citing Manti v. Gunari (1970) 5 Cal.App.3d 442]), but then recognizes that some cases have held the rule against inconsistent facts only applies to verified pleadings. (Ibid. [citing Travelers, supra, 70 Cal.App.5th at p. 360, fn. 15.].) This court will follow “the modern practice allows that party to plead in the alternative and make inconsistent allegations.” (Mendoza v. Continental Sales Co., supra, 140 Cal.App.4th at p. 1402.)

If the facts at trial demonstrate the inconsistency Gilead claims, Aetna will have to make an election before judgment, but until then Aetna is entitled to pursue potentially inconsistent factual allegations.

If the tentative ruling is uncontested, it shall become the order of the court. Thereafter, counsel for Aetna shall prepare a written order consistent with the court’s ruling for the court’s signature, pursuant to California Rules of Court, rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.