The brand-name and generic pharmaceutical companies of the world
had better hope that the U.S. Supreme Court grants Merck's petition for certiorari in the K-Dur pay-for-delay case (and
ultimately reverses the 3rd Circuit Court of Appeals). If not, I
have a feeling more of pharma manufacturers are going to find
themselves the target of class actions like the ones AstraZeneca
is now facing in New Jersey and Massachusetts federal court.
In the last week, three different direct purchasers have
filed class actions accusing AZ of conspiring with the generics
Ranbaxy, Teva and Dr. Reddy's to keep generic versions of the
blockbuster acid reflux drug Nexium off the market. Grant &
Eisenhofer and Vanek, Vickers & Masinifiled a complaint in New
Jersey for Meijer Distribution on Aug. 27. Hagens Berman Sobol
Shapiro and the Barrett Law Groupsued the next day in
Massachusetts on behalf of Professional Drug Company Inc. And on
Tuesday Cohn Lifland Pearlman Herrman & Knopf and Garwin
Gerstein & Fisher (among others) piled on with another New Jersey complaint, this one for Value Drug.
The Nexium cases are hardly the first time that
pharmaceutical customers have brought class actions based on
pay-for-delay allegations -- I've written, for instance, about
the multidistrict litigation claiming Pfizer conspired with generics to keep a monopoly on Lipitor -- but Linda Nussbaum of
Grant & Eisenhofer told me that the prospects for such cases
have improved as a result of the 3rd Circuit's ruling in July in
a case called In re K-Dur. Splitting in dramatic fashion with
three other federal appeals courts, the 3rd Circuit ruled that
pay-for-delay or reverse-payment deals, in which brand-name drug
makers pay generics to drop challenges to their patents, are
prima facie evidence of an illegal restraint of trade. That
ruling would open the door to treble damages for antitrust
violations against brand-name and generic pharma companies found
to have engaged in reverse-payment settlements. It's no surprise
that two of the new Nexium cases were filed in New Jersey, which
is in the 3rd Circuit. (Massachusetts is in the 1st Circuit,
which has not issued an appellate ruling on whether
pay-for-delay deals violate antitrust laws.)
But there is a big obstacle standing in the way of the
Nexium plaintiffs (and every other opportunistic pharma
purchaser hoping to take advantage of the 3rd Circuit's K-Dur
ruling): uncertainty about whether the K-Dur decision can
withstand Supreme Court scrutiny. Last month Merck's lawyers at
Williams & Connolly skipped a request for an en banc hearing at
the appeals court and instead asked the Supreme Court to take
the case, citing the circuit split and the "enormous legal and
practical significance" of the issue. Last week, even as the
Nexium suits were being filed, U.S. District Judge Mitchell
Goldberg of New Jersey stayed the multidistrict litigation over
an alleged pay-for-delay deal involving the Cephalon narcolepsy
drug Provigil until the Supreme Court decides whether to hear
K-Dur.
AstraZeneca spokesman Tony Jewell sent me a email statement
on the new Nexium suits. "The allegations in these complaints
are inaccurate and unfounded," it said. "AstraZeneca's Nexium
patents are valid, enforceable and would have been infringed.
The settlement agreements fully comply with the law and are
beneficial to consumers by licensing rights to our patents in
2014, six years earlier than the first expiring patent."
(Reporting by Alison Frankel)
Follow us on Twitter @AlisonFrankel, @ReutersLegal | Like us on Facebook