Abbott Laboratories v. Teva Pharmaceuticals Usa, Inc.

• Citation: 432 F.Supp.2d 408
• Decision Date: 26 May 2006
• Docket Number: No. CIV.A. 02-1512-KAJ.,No. CIV.A. 05-360-KAJ.,No. CIV.A. 05-340-KAJ.,No. CIV.A. 03-120-KAJ.,CIV.A. 02-1512-KAJ.,CIV.A. 03-120-KAJ.,CIV.A. 05-340-KAJ.,CIV.A. 05-360-KAJ.
• Parties: ABBOTT LABORATORIES, an Illinois corporation, Fournier Industrie et Sante, a French corporation, and Laboratoires Fournier S.A., a French corporation, Plaintiffs, v. TEVA PHARMACEUTICALS USA, INC., a Delaware Corporation, Defendant. Teva Pharmaceuticals USA, Inc., a Delaware corporation, Teva Pharmaceutical Industries Limited, an Israeli corporation, and Novopharm, Ltd., a Canadian corporation, Counterclaim— Plaintiffs, v. Abbott Laboratories, an Illinois corporation, Fournier Industrie et Sante, a French corporation, and Laboratoires Fournier S.A., a French corporation, Counterclaim-Defendants. Abbott Laboratories, an Illinois corporation, Fournier Industrie et Sante, a French corporation, and Laboratoires Fournier S.A., a French corporation, Plaintiffs, v. Impax Laboratories, Inc., a Delaware corporation, Defendant. Impax Laboratories, Inc., a Delaware corporation, Counterclaim-Plaintiff v. Abbott Laboratories, an Illinois corporation, Fournier Industrie et Sante, a French corporation, and Laboratoires Fournier S.A., a French corporation, Counterclaim-Defendants. In re TriCor Direct Purchaser Antitrust Litigation This Document Relates to: all Actions In re TriCor Indirect Purchaser Antitrust Litigation This Document Relates to: all Actions
• Court: U.S. District Court — District of Delaware

432 F.Supp.2d 408

ABBOTT LABORATORIES, an Illinois corporation, Fournier Industrie et Sante, a French corporation, and Laboratoires Fournier S.A., a French corporation, Plaintiffs, v. TEVA PHARMACEUTICALS USA, INC., a Delaware Corporation, Defendant.

Teva Pharmaceuticals USA, Inc., a Delaware corporation, Teva Pharmaceutical Industries Limited, an Israeli corporation, and Novopharm, Ltd., a Canadian corporation, Counterclaim— Plaintiffs, v. Abbott Laboratories, an Illinois corporation, Fournier Industrie et Sante, a French corporation, and Laboratoires Fournier S.A., a French corporation, Counterclaim-Defendants.

Abbott Laboratories, an Illinois corporation, Fournier Industrie et Sante, a French corporation, and Laboratoires Fournier S.A., a French corporation, Plaintiffs, v. Impax Laboratories, Inc., a Delaware corporation, Defendant.

Impax Laboratories, Inc., a Delaware corporation, Counterclaim-Plaintiff v. Abbott Laboratories, an Illinois corporation, Fournier Industrie et Sante, a French corporation, and Laboratoires Fournier S.A., a French corporation, Counterclaim-Defendants.

In re TriCor Direct Purchaser Antitrust Litigation

This Document Relates to: all Actions In re TriCor Indirect Purchaser Antitrust Litigation This Document Relates to: all Actions

No. CIV.A. 02-1512-KAJ.

No. CIV.A. 03-120-KAJ.

No. CIV.A. 05-340-KAJ.

No. CIV.A. 05-360-KAJ.

United States District Court, D. Delaware.

May 26, 2006.

COPYRIGHT MATERIAL OMITTED

Mary B. Graham, Esq., Morris, Nichols, Arsht & Tunnell, Wilmington, DE, Of Counsel: William F. Cavanaugh, Jr., Esq., Eugene M. Gelernter, Esq., Chad J. Peterman, Esq., Alexis A. Gander, Esq., Patterson, Belknap, Webb Tyler LLP, New York, NY, Counsel for Abbott Laboratories.

Frederick L. Cottrell, III, Esq., Anne Shea Gaza, Esq., Richards, Layton & Finger, Wilmington, DE, Of Counsel: Steven C. Sunshine, Esq., Maria M. DiMoscato, Cadwalader, Wickersham & Taft LLP, Washington, DC, Matthew P. Hendrickson, Esq., Bradley J. Demuth, Esq., Cadwalader, Wickersham & Taft LLP, New York, NY, Timothy C. Bickham, Esq., Steptoe, Johnson LLP, Washington, DC, Counsel for Fournier Industrie et Sante, and Laboratoires Fournier, S.A.

Josy W. Ingersoll, Esq., John W. Shaw, Esq., Young, Conaway, Stargatt & Taylor, LLP, Wilmington, DE, Of Counsel: David

M. Hashmall, P.C., Goodwin Procter LLP, New York, NY, Bruce M. Gagala, Esq., M. Daniel Hefner, Esq., Leydig, Voit & Mayer, Ltd., Chicago, IL, Kenneth A. Cohen, Esq., Elaine Herrmann Blais, Esq., Christopher Holding, Esq., Goodwin Procter LLP, Boston, MA, Counsel for Teva Pharmaceuticals USA, Inc. and Novopharm, Ltd.

Richard K. Herrmann, Esq., Mary B. Matterer, Esq., Morris, James, Hitchens & Williams LLP, Wilmington, DE, Of Counsel: Mark A. Umley, Esq., Asim M. Bhansali, Esq., Paula L. Blizzard, Esq., Keker and Van Nest LLP, San Francisco, CA, Philip J. McCabe, Esq., Kenyon & Kenyon, San Jose, CA, C. Kyle Musgrove, Esq., Kenyon & Kenyon, Washington, DC, John C. Vetter, Esq., Kenyon & Kenyon, New York, NY, Counsel for Impax Laboratories, Inc.

Jeffrey S. Goddess, Esq., Rosenthal, Monhait Gross & Goddess; P.A., Wilmington, DE, Of Counsel: Bruce E. Gerstein, Esq., Barry S. Taus, Esq., Adam Steinfeld, Esq., Garwin, Gerstein & Fisher, L.L.P., New York, NY, Stuart E. Des Roches, Esq., Odom, & Des Roches, L.L.P., New Orleans, LA, Linda P. Nussbaum, Esq., Cohen, Milstein, Hausfeld & Toll P.L.L.C., New York, NY, David P. Smith, Esq., Percy, Smith & Foote, Alexandria, LA, Daniel Berger, Esq., David Sorensen, Esq., Berger & Montague, P.C., Philadelphia, PA, Donald L. Bilgore, Esq., Bilgore, Reich, Levine & Kantor, Rochester, NY, Sperling & Slater, Daar & Vanek, P.C., Chicago, IL, Liaison Counsel for Director Purchaser Class.

Elizabeth M. McGeever, Esq., Prickett, Jones, Elliott, P.A., Wilmington, DE, Of Counsel: Richard Alan Arnold, Esq., Scott E. Perwin, Esq., Lauren C. Ravkind, Esq., Kenny Nachwalter, P.A., Miami, FL, Steve D. Shadowen, Esq., Hangley Aronchick Segal & Pudlin, Harrisburg, PA, Joseph T. Lukens, Esq., Esq., Hangley Aronchick Segal & Pudlin, Philadelphia, PA, Counsel for CVS and Walgreen.

Jonathan L. Parshall, Esq., Murphy Spadaro & Landon, Wilmington, DE, Counsel for Pacificare Health Systems, Inc.

Pamela S. Tikellis, Esq., Robert J. Kriner, Jr., Esq., A. Zachary Naylor, Esq., Robert R. Davis, Esq., Chimicles & Tikellis LLP, Wilmington, DE, Of Counsel: Bernard Persky, Esq., Christopher J. Mc-Donald, Esq., Kellie C., Safer, Esq., Labaton Scharow & Rudoff LLP, New York, NY, Bryan L. Clobes, Esq., William R. Kane, Esq., Miller Faucher and Cafferty LLP, Philadelphia, PA, Patrick E. Cafferty, Esq., Miller Faucher and Cafferty LLP, Ann Arbor, MI, Marvin A. Miller, Esq., Jennifer W. Sprengel, Esq., Miller Faucher and Cafferty LLP, Chicago, IL, Jeffrey L. Kodroff, Esq., Theodore M. Lieverman, Esq., Simon B. Paris, Esq., Spector, Roseman & Kodroff, P.C., Philadelphia, PA, Thomas M. Sobol, Esq., David S. Nalvin, Esq., Gergory H. Matthews, Esq., Hagens Berman Sobol Shapiro LLP, Cambridge, MA, Steve W. Berman, Esq., Hagens Berman Sobol Shapiro LLP, Seattle, WA, Liaison Counsel for the Indirect Purchasers.

MEMORANDUM OPINION

JORDAN, District Judge.

TABLE OF CONTENTS

                  I. INTRODUCTION ........................................................413
                 II. BACKGROUND...........................................................413
                

                  A. Generic Drugs and the Operation of the Hatch-Waxman Act...............414
                  B. Defendants' Anticompetitive Conduct...................................415
                     1. The Switch from Capsules to Tablets................................415
                     2. The Switch from Original Tablets to New Tablets....................416
                  C. Plaintiffs' Legal Claims..............................................418
                III. STANDARD OF REVIEW....................................................419
                 IV. DISCUSSION............................................................419
                  A. Antitrust Liability for Product Formulation Changes...................420
                     1. The Appropriate Standard...........................................420
                     2. Plaintiffs' Allegations Relating to Product Innovation.............423
                     3. Foreclosure from the Fenofibrate Market............................423
                     4. Actions Taken to Support the Formulation Changes...................423
                  B. Sham Litigation.......................................................424
                     1. Probable Cause for Alleging Infringement...........................425
                     2. Summary Judgment Opinion...........................................426
                     3. Inequitable Conduct................................................426
                  C. Allegations of an Overall Scheme to Monopolize........................428
                  D. Antitrust Injury......................................................430
                     1. Walker Process Claims..............................................430
                     2. Sham Litigation Claims.............................................431
                  E. Allegations of Joint Conduct..........................................431
                     1. Allegations Against Abbott.........................................431
                     2. Allegations Against Fournier.......................................433
                  F. State Law Claims......................................................433
                V. CONCLUSION..............................................................434
                

I. INTRODUCTION

These antitrust actions have been brought by various plaintiffs¹ (collectively "Plaintiffs") against Abbott Laboratories ("Abbott"), and Fournier Industrie et Sante and Laboratoires Fournier S.A. (collectively "Fournier").² Before me is the Defendants' Consolidated Motion to Dismiss Plaintiffs' Complaints (C.A. No. 02-1512, Docket Item ["D.I."] 383, C.A. 02-1512, D.I. 429; C.A. 03-120, D.I. 294; C.A. 05-340, D.I. 38; C.A. 05-360, D.I. 39; the "Motion"). Jurisdiction is proper under 28 U.S.C. §§ 1331 and 1337. For the reasons that follow, I will deny the Motion.

II. BACKGROUND³

According to Plaintiffs, Abbott and Fournier have manipulated the statutory framework that regulates the market for pharmaceutical drugs in order to prevent generic substitutes for the branded drug TriCor® from having a meaningful opportunity to enter the market. (C.A. No. 02-1512, D.I. 360, Ex. A at ¶3.)⁴ As context for those allegations, a description of the approval process for generic pharmaceutical drugs may be helpful.

A. Generic Drugs and the Operation of the Hatch-Waxman Act

Before a pharmaceutical drug is released into the market, it must be approved by the Food and Drug Administration ("FDA"), pursuant to the Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301 et seq. (D.I. 360, Ex. A at ¶32.) The manufacturer of a new branded drug must submit detailed safety and efficacy data for the drug to the FDA in a New Drug Application ("NDA"). 21 U.S.C. § 355(a). The NDA must also list "the patent number and the expiration date of any patent which claims the drug . . . or which claims a method of using such drug." 21 U.S.C. § 355(b)(1). After approval, information about the branded drug, including patent information, is published by the FDA in a publication entitled "Approved Drug Products with Therapeutic Equivalence Evaluations," which is generally called the "Orange Book," after the color of its cover. (See D.I. 360, Ex. A at ¶ 35.)

The Drug Price Competition and Patent Term Restoration Act of 1984 (the "Hatch-Waxman Act"), codified at 21 U.S.C. §§ 355, 360cc and 35 U.S.C. §§ 156, 271, 282, provides a framework for the introduction of generic versions of previously approved branded drugs. Under that framework, a generic manufacturer may submit an Abbreviated New Drug Application ("ANDA") to the FDA. 21 U.S.C. § 355(j). (D.I. 360, Ex. A at ¶ 34.) The ANDA process allows the generic manufacturer to incorporate efficacy and safety data submitted to the FDA in the NDA for a branded drug, as long as the generic drug is shown to be bioequivalent to that branded drug. 21 U.S.C. § 355(j)(2)(A). (D.I. 360,...