In re Valsartan, Losartan, & Irbesartan Prods. Liab. Litig.
| Decision Date | 29 January 2021 |
| Docket Number | MDL No. 2875 (RBK/KW) |
| Parties | IN RE VALSARTAN, LOSARTAN, AND IRBESARTAN PRODUCTS LIABILITY LITIGATION This Document Relates To All Actions. |
| Court | U.S. District Court — District of New Jersey |
Before this Court are defendants' Motions to Dismiss (Doc. No. 520, 522, 523) the three Master Complaints1 filed in this Multi-District Litigation ["MDL"], which involves the sale of a generic blood pressure medication found to be contaminated with probable human carcinogens. Because the MTDs seek dismissal of several claims for each set of plaintiffs, the Court is issuing a series of opinions to resolve the motions. Each opinion will be numbered with this opinion being the fourth in the series.
This OPINION 4 resolves defendants' arguments relating to Rule 12(b)(6) pleading deficiencies. An ORDER 4 of this date accompanies this OPINION 4.
The COURT HAVING REVIEWED the parties' submissions (without a hearing in accordance with Rule 78.1 (b)) relating to the fraud-based claims, including negligent misrepresentation, and on the strict liability claims for failure to warn and for design defect, and for the reasons stated below, and for good cause shown:
As for the Fraud-based Claims:
Against the Manufacturing Defendants:
The Court DENIES the Manufacturing Defendants' motion to dismiss the fraud-based claims (fraudulent misrepresentation; fraudulent concealment; fraud by omission; state consumer protection statute claims that sound in fraud) as well as the negligent misrepresentation claims, in the ELMC, the PIMC, and the MMMC..
Against the Wholesaler Defendants and the Pharmacy Defendants:
The Court GRANTS the Pharmacy Defendants' and the Wholesaler Defendants' motions to dismiss the fraud-based claims (fraudulent misrepresentation; fraudulent concealment; fraud by omission; state consumer protection statute claims that sound in fraud) in the ELMC, the PIMC, and the MMMC and dismisses these claims WITHOUT PREJUDICE.
Plaintiffs may file a motion for LEAVE TO AMEND these Master Complaints as to the fraud-based claims against the Pharmacy Defendants and the Wholesaler Defendants, according to the deadline set forth in the accompanying Order.
As for the Negligent Misrepresentation Claims:
Against the Wholesaler Defendants and the Pharmacy Defendants:
The Court GRANTS the Pharmacy Defendants' and the Wholesaler Defendants' motions to dismiss the negligent misrepresentation claims in the in the ELMC, the PIMC, and the MMMC and dismisses these claims WITHOUT PREJUDICE.
Plaintiffs may file a motion for LEAVE TO AMEND these Master Complaints as to the negligent misrepresentation claims against the Pharmacy Defendants and the Wholesaler Defendants, according to the deadline set forth in the accompanying Order.
As for Strict Liability-Design Defect Claims Relating to Manufacturing Defect:
Against the Manufacturing Defendants in the PIMC
The Court GRANTS the Manufacturing Defendants' motion to dismiss the strict liability-manufacturing defect claim in the PIMC that arise under the laws of Delaware, Massachusetts, North Carolina, Virginia, Indiana, and Pennsylvania and dismisses these claims WITH PREJUDICE.
As for Strict Liability-Design Defect Claims NOT Relating to Manufacturing Defect:
The Court DENIES the Manufacturing Defendants' motion to dismiss the strict liability-design defect claims in the PIMC that arise under the laws of states that do NOT prohibit strict liability- design defect claims.
The Court DENIES the Manufacturing Defendants' motion to dismiss the strict liability-failure to warn claims in the PIMC and the MMMC that arise under the laws of states that do NOT prohibit strict liability failure to warn claims.
The Court GRANTS the Manufacturing Defendants' motion to dismiss the strict liability-failure to warn claims in the PIMC and the MMMC that arise under the laws of states that PROHIBIT strict liability failure to warn claims.
The Court DENIES the Wholesaler Defendants' and the Pharmacy Defendants' motions to dismiss the strict liability-failure to warn claims in the PIMC and the MMMC.
These defendants , at a later, appropriate stage of these proceedings, may raise this issue with the Court by way of a motion for summary judgment.
Millions of Americans suffer from high blood pressure. Two common medications used to treat this condition are Diovan and Diovan HCT and Exforge and Exforge HCT. This case involves their generic counterparts, Valsartan and its combination therapy with hydrochlorothiazide and Amlodipine-valsartan and its combination therapy with hydrochlorothiazide (collectively the valsartan-containing drugs or "VCDs"). While generic drugs are supposed to be bioequivalent to their brand-name counterparts, at some point these VCDs were found to be contaminated with probable human carcinogens known as N-nitrosodimethylamine ("NDMA") and N-nitrosodiethylamine ("NDEA"). This led to a recall of the VCDs in July of 2018. The current lawsuits stem from defendants' manufacturing, promotion, and sale of the VCDs and their subsequent recall. Plaintiffs, consumers and Third-Party Payors ["TPP"] who purchased or made reimbursements for defendants' contaminated VCDs, brought an economic damage and a medical monitoring class action against Defendants. They also brought a personal injury action against defendants, which are entities with various and sometimes overlapping roles within the supply chain. They include the manufacturers ("Manufacturing Defendants") of the drug (both the manufacturers of the active pharmaceutical ingredient and the manufacturers that make the finished drug product), the wholesalers ("Wholesaler Defendants") who obtain the finished drug product and resell it to retailers, and consumer-level distributors ("Pharmacy Defendants"). Because the mechanics of the pharmaceutical supply chain are more important for this motion, we will briefly provide an overview of how it works and each defendants' role in it.
1.1 Pharmaceutical Supply Chain
Generally, there are four actors in the pharmaceutical supply chain: (1) the manufacturers; (2) wholesaler distributors; (3) pharmacies; and (4) pharmacy benefit managers.2 The manufacturers consist of both the active pharmaceutical ingredient ("API") manufacturers and the finished-dose manufacturers. The API manufacturers create the pharmaceutical ingredient in the medication that is used to produce the intended pharmacological effect. Often, the API manufacturers are part of a company's vertically integrated supply chain, meaning one company operates at both the manufacturer and wholesaler/distributor level. However, on occasion, pharmaceutical companies will contract with other companies to manufacture the API instead of manufacturing it themselves. Here, these companies are referred to as the finished-dose manufacturers. The manufacturers, either the finished dose or API manufacturers, then distribute the drugs to wholesalers, who in turn redistribute the drug to pharmacies for sale to the public.
In this case, the active pharmaceutical ingredient manufacturers were: (1) Zhejiang Huahai Pharmaceutical Co., Ltd—the parent company for Huahai US Inc., Prinston Pharmaceutical Inc. d/b/a Solco Healthcare LLC, and Solco Healthcare US, LLC (collectively known as "ZHP defendants"); (2) Hetero Drugs, Limited—the parent company for Hetero Labs, Ltd., Hetero USA Inc., and Camber Pharmaceuticals, Inc. (collectively known as "Hetero defendants"); (3) Mylan N.V.—the parent company for Mylan Laboratories, Ltd. and Mylan Pharmaceuticals, Inc. (collectively known as "Mylan defendants"); and (4) Aurobindo Pharma, Ltd.—the parent company for Aurobindo Pharma USA, Inc. and Aurolife Pharma, LLC (collectively known as "Aurobindo defendants"). These API manufacturers also acted as finished-dose manufacturers.
The finished-dose manufacturers were: (1) Teva Pharmaceutical Industries Ltd.—the parent company for Teva Pharmaceuticals USA, Inc., Arrow Pharm Malta Ltd., Actavis Pharma, Inc., and Actavis, LLC (collectively known as "Teva Defendants"); and (2) Torrent Private Limited—the parent company for Torrent Pharmaceuticals, Ltd., and Torrent Pharma, Inc. (collectively known as "Torrent defendants").
The ZHP defendants manufactured the valsartan-containing API for Teva Pharmaceutical Industries Ltd., Teva Pharmaceuticals USA, Inc., and Torrent Pharmaceuticals, Ltd. Similarly, the Mylan defendants manufactured some of the valsartan-containing API for Teva Pharmaceuticals USA, Inc.
The finished-dose manufacturers then distributed their VCDs to the wholesalers, which included Cardinal Health, McKesson Corporation, and AmerisourceBergen Corporation. These wholesalers, in turn, redistributed the VCDs to the retail pharmacies for final distribution to the general public. The pharmacies included CVS Health, Walgreens Boots Alliance, Inc., Express Scripts, Inc., OptumRx, Walmart, Inc., the Kroger Co., Rite Aid Corp., Albertsons Companies, LLC., and Humana Pharmacy, Inc.
1.2 Factual Background
In the wake of the success of the blood pressure medications DIOVAN and EXFORGE, many generic drug manufacturers sought to capitalize on this success by introducing their own generic versions of the Valsartan drug. Doc. No. 398, Am. ELMC ¶¶ 217-20. They filed Abbreviated New Drug Applications ("ANDA") with the FDA and waited for Novartis' patents for DIOVAN and EXFORGE to expire so that they could enter the market. Id. ¶ 219. Upon approval of their ANDAs, the Manufacturing Defendants sought and received inclusion of their VCDs in the Orange Book—an FDA approved list of drugs that are considered to be both effective and safe. Id. ¶ 361. Inclusion in the Orange Book imposed a continuing obligation on the Manufactuing Defendants to demonstrate that the VCDs were therapeutically...
To continue reading
Request your trial