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An Illinois federal judge on Tuesday kept alive a high-stakes antitrust battle, refusing to dismiss Walgreens and Kroger’s lawsuit that accuses Biogen Inc. of illegally throttling competition for its multiple sclerosis drug Tecfidera. U.S. District Judge April Perry ruled from the bench in Chicago that the pharmacy giants have now alleged enough to show they “suffered a concrete injury as a result of Biogen’s conduct.”

Perry had earlier granted Biogen’s dismissal motion in February, finding Walgreen Co. and The Kroger Co. failed to demonstrate how the drugmaker’s alleged formulary manipulation scheme produced a viable antitrust injury. This time the retailers cleared the bar.

Allegations of Market Manipulation

Walgreens and Kroger contend the purported scheme forced them and their wholesalers to purchase and dispense far more of Biogen’s costly brand-name Tecfidera than cheaper generic rivals. Their amended complaint states they run pharmacies in most states that either mandate or permit automatic substitution of a brand drug with a generic when the switch lowers patient costs. Biogen’s alleged tactics, they claim, locked them into stocking and handing out the pricier branded version instead.

Judge Perry acknowledged Tuesday that she, like Biogen, would have “preferred and expected to see” sharper, more explicit allegations. Yet “neither of us have the job of authoring the complaint.” The revisions, she said, now allow a plausible injury to be reasonably inferred from the claim that the chains had to buy more of the higher-priced branded drugs.

She ordered Biogen to respond to the complaint by Oct. 8.

Coupons, Formularies and a Next-Generation Push

The pharmacy operators allege Biogen paid pharmacy benefit managers to rewrite certain health-plan formularies so that MS patients faced essentially identical out-of-pocket costs for branded Tecfidera or a competing generic. Biogen also handed insured patients coupons that made the brand appear cheaper than generics and scrambled to shift the market toward its “next-generation” drug Vumerity before generic Tecfidera could reach shelves, according to the suit.

The prior complaint was tossed partly because neither plaintiff claimed it sold to any patients touched by the contested formularies or operated in states enforcing the substitution laws. While the alleged manipulation reached them by ripple effect, the judge had ruled they needed tighter facts to establish antitrust standing.

Walgreens and Kroger are represented by Scott E. Perwin, Lauren C. Ravkind, Anna T. Neill and Trevor Scheetz of Sperling Kenny Nachwalter LLC. Biogen is represented by Lin W. Kahn, William D. Coglianese, Daniel Johnson, Eddie Hasdoo and Julie E. McEvoy of Jones Day.