In re Suboxone (Buprenorphine Hydrochloride & Nalaxone) Antitrust Litig., MDL NO. 2445

• Court: United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
• Writing for the Court: Goldberg, District Judge
• Citation: 421 F.Supp.3d 12
• Docket Number: MDL NO. 2445,13-md-2445
• Decision Date: 26 September 2019
• Parties: IN RE: SUBOXONE (BUPRENORPHINE HYDROCHLORIDE AND NALAXONE) ANTITRUST LITIGATION This Document Applies to All Actions

421 F.Supp.3d 12

IN RE: SUBOXONE (BUPRENORPHINE HYDROCHLORIDE AND NALAXONE) ANTITRUST LITIGATION

This Document Applies to All Actions

MDL NO. 2445
13-md-2445

United States District Court, E.D. Pennsylvania.

Signed September 26, 2019
Filed September 27, 2019

421 F.Supp.3d 25

MEMORANDUM

Goldberg, District Judge

The Plaintiffs in this multi-district litigation case allege anticompetitive conduct by Defendant Reckitt Benckiser, Inc.("Reckitt")¹ in connection with their Suboxone product—a drug used to combat opioid addiction. Plaintiffs' claims focus on a relatively new theory of antitrust liability, referred to as a "product hop," pursuant to the unique regulatory and statutory scheme that governs the marketing and distribution of pharmaceutical drugs. Under this theory, a pharmaceutical company makes modest reformulations to a brand-name drug prior to the expiration of its market exclusivity for the purpose of stymieing generic competition and preserving monopoly profits.

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The Plaintiffs are the Direct Purchasers of Suboxone ("Direct Purchasers" or "DPPs") and the End Payors of Suboxone ("End Payors" or "EPPs"), who claim that Reckitt switched from sublingual Suboxone tablets to a sublingual Suboxone film for the purpose of foreclosing generic competition. According to Plaintiffs, this switch (the "product hop") was accompanied by Reckitt disparaging the tablet through fabricated safety concerns and ultimately removing Suboxone tablets from the market just as generic Suboxone tablets were able to begin competing. Reckitt is also alleged to have manipulated FDA regulations to delay the entry of generic Suboxone onto the market, thereby unlawfully maintaining a monopoly in violation of Section 2 of the Sherman Act. According to all Plaintiffs, Reckitt's conduct foreclosed competition and resulted in the overpayment for Suboxone. Reckitt acknowledges the product switch, but strenuously asserts that the switch was done to market and sell an improved and superior product.

Both the DPPs and the EPPs have now sought class certification. For the following reasons, I will certify the DPP class under Federal Rule of Civil Procedure 23(b)(3), deny certification of the EPP class under Federal Rule of Civil Procedure 23(b)(2), and grant certification of the EPP class under Federal Rule of Civil Procedure 23(c)(4).

I. FACTUAL BACKGROUND

To fully understand the basis of Plaintiffs' antitrust theories and their requests for class certification, a review of the regulatory background and the alleged anticompetitive conduct is necessary. The pertinent facts alleged by Plaintiffs are as follows:²

A. Regulatory Framework – Hatch-Waxman Act

1. Generic Drug Approval Process

Under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301 – 92 ("FDC Act"), a manufacturer who creates a new drug must obtain the approval of the Food and Drug Administration ("FDA") to sell the new drug by filing a New Drug Application ("NDA"). An NDA must include submission of specific data concerning the safety and efficacy of the drug, as well as any information on applicable patents. (Direct Purchaser Plaintiffs' ("DPP") Sec. Am. Compl. ¶ 43.)

In an effort to speed the entry of generic drugs into the market, Congress passed the Drug Price Competition and Patent Term Restoration Act of 1984 ("Hatch-Waxman"), 21 U.S.C. § 355. Hatch-Waxman provides brand-name manufacturers with several means, in addition to traditional patent rights, to obtain protection from generic competition for set, and specifically limited, periods of time. For example, for truly new and innovative pioneer drugs, the FDA may grant a brand manufacturer a "new chemical entity" ("NCE") exclusivity period of five years. (Id. ) If an NDA drug treats a rare condition, the FDA may grant seven years of orphan

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drug exclusivity during which time no corresponding generic drug may be approved or commercialized. (Id. ¶¶ 44–45.)

The Hatch-Waxman Act also simplified the regulatory hurdles for prospective generic manufacturers by eliminating the need for them to duplicate the clinical studies used to obtain approval for the brand-name counterpart drug. Under the Act, generic manufacturers may file and gain approval for their drugs through filing an Abbreviated New Drug Application ("ANDA"), which relies on the scientific findings of safety and efficacy included by the brand-name drug manufacturer in the original NDA. The ANDA filer must scientifically establish that the generic drug it intends to market is just as safe and effective as the corresponding brand-name drug through demonstrations of bioequivalence, i.e. , that the generic product delivers the same amount of active ingredient into a patient's blood stream for the same amount of time as does the corresponding brand-name drug, and hence has the same clinical effect. (Id. ¶¶ 46–47.)

Oral drugs proven to be both bioequivalent and pharmaceutically equivalent—meaning the generic drug has the same active ingredient as the branded oral drug—receive an "AB" rating from the FDA, indicating they are therapeutically equivalent to other drugs with the same rating in the same category. In most cases, only oral generic drugs with an AB rating may be substituted by pharmacists for a physician's prescription of a brand-name drug without the physician's approval. Once the FDA approves an ANDA and determines that the generic drug is AB-rated to the branded drug, state laws govern how the generic may be substituted for the brand-name drug prescribed by physicians. In most states and under most health plans, a pharmacist may, and in many cases must, substitute an AB-rated generic drug for a prescribed brand-name drug. (Id. ¶¶ 48–49, 55.)

Competition from low cost AB-rated generic drugs saves consumers billions of dollars a year. When an AB-rated generic drug enters the market, the brand-name company often suffers a rapid, steep decline in sales. AB-rated generic competition enables direct and indirect purchasers to obtain both the generic drugs and the brand-name drugs at substantially lower prices. (Id. ¶¶ 56–58.)

2. The SSRS/REMS Process

Under the FDA Amendments Act of 2007, the FDA has the authority to require Risk Evaluation and Mitigation Strategies ("REMS") from manufacturers to ensure that the benefits of a drug or biological product outweigh its risks. A REMS can include a medication guide, a package insert, and potential restrictions on the distribution of the drug. If a REMS is required for a particular generic product, the FDA will withhold ANDA approval until such time that an appropriate REMS has been created by the ANDA sponsor. The FDA can also require that ANDA sponsors coordinate with the manufacturer of the branded counterpart drug for the purposes of creating a Single Shared REMS program ("SSRS"), which is a single REMS program to be used by both the sellers of the brand drug and AB-rated generic equivalents. Congress has specifically prohibited brand-name drug manufacturers from using REMS "to block or delay approval of" ANDAs. (Id. ¶¶ 62–65.)

3. Citizen Petitions

Pharmaceutical companies have multiple avenues and opportunities through which to communicate their views to the FDA. One such avenue is by filing a "Citizen Petition," which provides a forum for individuals or businesses to express and support genuine concerns about the safety, scientific, or legal issues regarding a product

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at any time before, or after, market entry. To move the FDA to take action regarding drug approval requirements, the petition must include supportive, clinically meaningful data, and the requested relief must be consistent with the Hatch-Waxman statutory and regulatory framework. The FDA must respond to each Citizen Petition within 180 days after the date on which the petition was submitted, and the response may approve the request in whole or in part, or deny the request. A response to a Citizen Petition may be appealed under the Administrative Procedures Act. (Id. ¶¶ 66–70.)

Plaintiffs claim that abusive and anticompetitive Citizen Petitions have become an increasingly common problem in the last several years and, in some cases, are filed with the intended effect of delaying the approval of generic drugs while the FDA evaluates the Citizen Petition. To deal with the potential anticompetitive abuse of the citizen petition process, Congress passed the Food and Drug Administration Amendments Act ("FDAAA"), enacted on September 27, 2007, which adds new section 505(q) to the FDC Act. This section provides that the FDA may not delay approval of an ANDA application because of a requirement to take action related to the pending Citizen Petition unless the delay is necessary to protect the public health. (Id. ¶¶ 73, 75, 77.)

B. FDA Approval of Suboxone Tablets

Defendant Reckitt developed two buprenorphine products for the treatment of opioid addiction: (a) a single-entity buprenorphine product, Subutex, intended for a brief induction stage, and (b) Suboxone, a buprenorphine-naloxone combination for post-induction maintenance treatment. At the time of their introduction, Subutex tablets and Suboxone tablets were the only...