After initially dismissing plaintiffs’ claims and being reversed by the First Circuit, on August 21, 2017, Chief U.S. District Judge William E. Smith for Rhode Island stated in an unsealed opinion that purchasers bringing “pay-for-delay” litigation against defendants, Warner Chilcott Co. LLC, Watson Pharmaceuticals Inc. and Lupin Pharmaceuticals Inc. had sufficiently pled their antitrust and fraud allegations. Defendants must now face multidistrict litigation, in which plaintiffs accuse them of entering into illegal reverse-payment deals to keep a generic of Loestrin, a birth control medication, off the market.
The judge’s only modification was to release defendants’ Warner and Watson’s parent companies, Allergan PLC and Actavis Inc., from liability, as the Court found that there were no direct allegations against them.
Cohen Milstein serves as Co-Lead Counsel for the proposed indirect purchasers class.
Filed on October 3, 2013 the lawsuit alleges that Warner entered into agreements with Lupin and Watson to delay the market entry of a generic version. Through these settlements, Warner sought to delay competition in order to artificially inflate its prices. The district court initially dismissed plaintiffs’ claims, on the grounds that the alleged payment at issue was not in the form of cash, based on its assessment of the Supreme Court’s ruling in FTC v. Actavis, a similar pay-for-delay lawsuit.
In February 2016 the U.S. Court of Appeals for the First Circuit found that the lower court’s assessment of the U.S. Supreme Court’s ruling of FTC v. Actavis was too strict, and that non-cash reverse payments, potentially including licensing deals and agreements, should also be assessed. This appellate ruling enabled Loestrin purchasers to file amended complaints in the district court in May 2016.
On remand, the District Court denied Defendants’ motion to dismiss. In addition to plaintiffs’ pay-for-delay allegations, Judge Smith’s August 2017 ruling allowed the plaintiffs’ claim that there was so-called Walker Process fraud in how Warner secured the patent that allowed it to keep its branded exclusivity. The suits claim that, among other things, Warner withheld from the U.S. Patent and Trademark Office a study that either wasn’t sufficient or would have proved the drug had been in public use for a year, meaning it was not patent eligible.
Judge Smith also allowed plaintiffs “product hopping” antitrust claims, which allege that Warner took a successful drug off the market to replace it with a reformulated version, forcing patients to switch to the new formulation in order to avoid competition as to its previous formulation of the drug.
The case name is: In re Loestrin 24 FE Antitrust Litigation, Case No. 1:13-md-02472, U.S. District Court, District of Rhode Island.