In re Lipitor Antitrust Litig.
| Decision Date | 12 September 2014 |
| Docket Number | Civil Action No. 3:12–cv–02389 PGS. |
| Citation | 46 F.Supp.3d 523 |
| Court | U.S. District Court — District of New Jersey |
| Parties | In re LIPITOR ANTITRUST LITIGATION. This Document Relates To: Direct Purchaser Class Actions. |
Sharon L. Caffrey, Duane Morris LLP, Philadelphia, PA, Sheila Raftery Wiggins, Duane Morris, LLP, Newark, NJ, for Lipitor Antitrust Litigation.
This matter comes before the Court on two motions to dismiss the Amended Complaint for failure to state a claim. Fed.R.Civ.P. 12(b)(6). It is an antitrust action which concerns the legality of a settlement between two drug manufacturers, Pfizer and Ranbaxy, regarding the pharmaceutical drug atorvastatin calcium under the brand name Lipitor ® (“Lipitor ”). Plaintiffs are direct purchasers of Lipitor seeking recovery of overcharges that were allegedly caused by the delayed entry provision of the settlement. In their amended complaint (ECF No. 472), Plaintiffs allege that a Settlement and License Agreement (“Settlement Agreement”) was entered between the defendants which involved a non-monetary “reverse payment” of absolving Ranbaxy from satisfying a claim of damages from the Accupril litigation in exchange for Ranbaxy's promise to stay out of the Lipitor market until an agreed-upon entry date (November 30, 2011). In addition, the Amended Complaint alleged that defendants blocked generic competition in the Lipitor market. Defendants Pfizer and Ranbaxy move to dismiss the Amended complaint. (ECF No. 493 and 490, respectively.)
This matter is part of multi-district litigation coordinated by this Court involving four groups of plaintiffs: (1) a proposed class of direct purchaser plaintiffs asserting claims under the Sherman Act (“Direct Purchaser Plaintiffs”); (2) several opt-out groups of direct purchaser plaintiffs asserting nearly identical claims to the direct purchaser class; (3) a proposed class of end-payor plaintiffs asserting claims under various states' laws; and (4) the RP Healthcare plaintiffs, a group of pharmacist plaintiffs, asserting claims under California law. This memorandum addresses the Direct Purchaser Plaintiffs' Amended Complaint only; however, portions of this memorandum including the legal analysis may pertain to the other groups of plaintiffs as they rely on the same allegations.
On April 23, 2012, the cases comprising the In Re: Lipitor Antitrust Litigation (MDL 2332) were transferred to this Court by the United States Judicial Panel on Multidistrict Litigation.
On May 16, 2012, this Court abstained from determining the motions to dismiss in anticipation of a decision by the Supreme Court of the United States in FTC v. Actavis, Inc., ––– U.S. ––––, 133 S.Ct. 2223, 186 L.Ed.2d 343 (2013), because there was a split in the circuits as to what standard was to control (the scope of the patent test or the quick look test) in evaluating a reverse payment settlement agreement (RPSA). (ECF No. 397.)
On August 21, 2012, this Court granted in part and denied in part the Plaintiffs' Motion to Compel Documents, ordering limited discovery. (ECF No. 447.) Because of the Court's inclination to await the Actavis decision, the Court allowed limited discovery during the interim period.
On June 17, 2013, the FTC v. Actavis, ––– U.S. ––––, 133 S.Ct. 2223, 186 L.Ed.2d 343 (2013), decision was published.
On September 5, 2013, this Court issued a Memorandum and Order dismissing some of the claims based on Walker Process,1 sham litigation, and sham citizen petition theories of Plaintiffs' prior Complaint.2 (See reference on pages 5 and 8). Allegations under Sherman Act's Section 2 were also dismissed insofar as they were based on Pfizer's alleged overarching anticompetitive scheme; hence, the only allegations of Plaintiffs that remain to be addressed are the reverse payment allegations. At the same time, the Court also granted Plaintiffs' Motion for Leave to Amend the Complaint. (ECF No. 455.) The rationale was that an amended complaint would update the facts of the complaint that were disclosed during discovery, and would incorporate changes based upon the recently decided Actavis case.3
Plaintiffs filed the Consolidated Amended Class Action Complaint against the Defendants on October 14, 2013. (ECF No. 472.) The Amended Complaint consists of three causes of action; the first two counts are properly before this Court, while the third count has already been decided. Count I alleges a violation of Section 1 of the Sherman Act. (Am. Compl. ¶ 296–305 ().) Count II alleges a violation of Section 2 of the Sherman Act. (Am. Compl. ¶ 306–312 ().) Count III alleges a violation of “15 U.S.C. §§ 1 and 2,” but plaintiffs acknowledge “the Court dismissed this count” and that it was being “restated here for purposes of appellate rights.” (Am. Compl. ¶ 313–315.) As such, this memorandum only addresses the first two counts.
In November 2013, Ranbaxy and Pfizer each filed a Motion to Dismiss the Amended Complaint. (ECF Nos. 490 and 493.)
On January 17, 2014, Plaintiffs filed a Brief in Opposition to the Defendants' Motions to Dismiss. (ECF No. 509; ECF No. 510 (redacted).)
On February 7, 2014, Defendants Pfizer and Ranbaxy filed a Reply Brief to Plaintiffs' Opposition to Motion. (ECF No. 524; 533 (redacted).)
The Court held oral argument regarding this matter on March 6, 2014 (ECF No. 532).
The following six direct purchaser plaintiffs are referred to collectively as the “Plaintiffs.”
Plaintiff Stephen L. LaFrance Holdings, Inc. is a corporation organized under the laws of Delaware and located in Pine Bluff, Arkansas. Plaintiff Stephen L. LaFrance Pharmacy, Inc. d/b/a SAJ Distributors (collectively with Stephen L. LaFrance Holdings, Inc., “SAJ”) is a wholly owned subsidiary of Stephen L. LaFrance Holdings, Inc., organized under the laws of Arkansas and located in Pine Bluff, Arkansas. During the class period, McKesson Corp., SAJ's assignor, purchased Lipitor directly from Pfizer and alleges injury as a result of all of the defendants' alleged unlawful conduct. McKesson Corp. resold, and will continue to resell, some of that Lipitor to SAJ. SAJ is the assignee of the claims of McKesson Corp. to the extent of those direct purchases from Pfizer. (Am. Compl. ¶ 14, ECF No. 472.)
Plaintiff Burlington Drug Co., Inc. is a corporation organized under the laws of the State of Vermont and located at 91 Catamount Drive, Milton, Vermont, 05468. During the class period, Burlington Drug Co. purchased Lipitor directly from Pfizer, and purchased generic Lipitor directly from Ranbaxy, and alleges injury as a result of all of the defendants' alleged unlawful conduct. (Am. Compl. ¶ 15.)
Plaintiff Value Drug Company is a corporation organized under the laws of the Commonwealth of Pennsylvania and located at One Golf View Drive, Altoona, Pennsylvania 16601. During the class period, Value Drug Company purchased Lipitor directly from Pfizer, and purchased generic Lipitor directly from Ranbaxy, and alleges injury as a result of all of the defendants' alleged unlawful conduct. (Am. Compl. ¶ 16.)
Plaintiff Professional Drug Company, Inc. is a corporation organized under the laws of the State of Mississippi with its principal place of business in Biloxi, Mississippi. During the class period, Professional Drug Company, Inc. purchased Lipitor directly from Pfizer. (Am. Compl. ¶ 17.)
Plaintiff Rochester Drug Co–Operative, Inc. (“RDC”) is a stock corporation duly formed and existing under the New York Cooperative Corporations Law, with its principal place of business located at 50 Jet View Drive, Rochester, New York 14624. During the class period, RDC purchased branded Lipitor directly from Pfizer, and purchased generic Lipitor directly from Ranbaxy. (Am. Compl. ¶ 18.)
Plaintiff American Sales Company LLC is a Delaware corporation with its principal place of business located in Lancaster, New York. During the class period, Cardinal Health, Inc., American Sales Company's assignor, purchased Lipitor directly from Pfizer and alleges injury as a result of all of the defendants' alleged unlawful conduct. Cardinal Health, Inc. resold, and will continue to resell, some of that Lipitor to American Sales Company. American Sales Company is the assignee of the claims of Cardinal Health, Inc., to the extent of those direct purchases from Pfizer. (Am. Compl. ¶ 19.)
The defendants referenced in the following three paragraphs are referred to collectively or alternatively as “Pfizer.”
Defendant Pfizer, Inc. is a corporation organized and existing under the laws of the State of Delaware, and has a place of business at 235 East 42nd Street, New York, New York 10017. At all relevant times, Pfizer, Inc. sold branded Lipitor directly to the direct purchasers and/or their assignors, and to the other members of the Direct Purchaser Class. Pfizer, Inc. is also alleged to have engaged in the conduct challenged in this case and attributed to Pfizer, itself and/or through its various employees and/or other agents acting within the course and scope of their duties and/or with actual, apparent, or ostensible authority in connection therewith. (Am. Compl. ¶ 21.)
Defendant Pfizer Manufacturing Ireland, formerly known as Pfizer Ireland Pharmaceuticals, formerly known as Warner Lambert Export, Ltd., is a partnership organized and existing under the laws of Ireland, with registered offices at Pottery Road, Dun Laoghaire, Co. Dublin, Ireland. Pfizer Ireland Pharmaceuticals, a wholly-owned indirect subsidiary of defendant Pfizer, Inc., was the exclusive licensee of the '995 patent and other patents (need full cite of patent). At all relevant times, Defendant Pfizer Manufacturing Ireland engaged in the conduct challenged in this case and attributed to Pfizer, itself and/or through its various employees and/or other agents acting within the course and scope of their duties and/or with...
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