Meijer, Inc. v. Ferring B.V. (In re DDAVP Indirect Purchaser Antitrust Litig.)

• Decision Date: 17 October 2012
• Docket Number: No. 05–CV–2237 (CS).,05–CV–2237 (CS).
• Citation: 903 F.Supp.2d 198
• Parties: In re DDAVP INDIRECT PURCHASER ANTITRUST LITIGATION. Meijer, Inc., Meijer Distribution, Inc., Rochester Drug Co–Operative, Inc., Louisiana Wholesale Drug Company, Inc., Vista Healthplan, Inc., Pennsylvania Employees Benefit Trust Fund, Painters District Council No. 30 Health and Welfare Fund, Philadelphia Federation of Teachers Health and Welfare Fund, and Helen Seamon, Indirect Purchaser Plaintiffs, v. Ferring B.V., Ferring Pharmaceuticals, Inc., and Aventis Pharmaceuticals, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

903 F.Supp.2d 198

In re DDAVP INDIRECT PURCHASER ANTITRUST LITIGATION.

Meijer, Inc., Meijer Distribution, Inc., Rochester Drug Co–Operative, Inc., Louisiana Wholesale Drug Company, Inc., Vista Healthplan, Inc., Pennsylvania Employees Benefit Trust Fund, Painters District Council No. 30 Health and Welfare Fund, Philadelphia Federation of Teachers Health and Welfare Fund, and Helen Seamon, Indirect Purchaser Plaintiffs,

v.Ferring B.V., Ferring Pharmaceuticals, Inc., and Aventis Pharmaceuticals, Inc., Defendants.

No. 05–CV–2237 (CS).

United States District Court,

S.D. New York.

Oct. 17, 2012.

Kevin B. Love, Jason G. Andrew, Criden & Love, P.A., South Miami, FL, Theodore M. Lieverman, Spector Roseman Kodroff & Willis, P.C., Philadelphia, PA, Joseph H. Meltzer, Kessler Topaz Meltzer & Check LLP, Radnor, PA, Patrick E. Cafferty, Cafferty & Faucher LLP, Ann Arbor, MI, for Indirect Purchaser Plaintiffs.

Douglas L. Wald, Barbara H. Wootton, Christopher J. Flack, McCormick A. Conforti, Arnold & Porter LLP, Washington, D.C., for Defendants Ferring B.V. and Ferring Pharmaceuticals, Inc.

John M. Majoras, Julie E. McEvoy, Christopher R. Farrell, Jones Day, Washington, D.C., for Defendant Aventis Pharmaceuticals, Inc.

OPINION AND ORDER

SEIBEL, District Judge.

Before the Court is the motion of Defendants Ferring B.V., Ferring Pharmaceuticals, Inc., and Aventis Pharmaceuticals, Inc., (Doc. 103), seeking dismissal of the Amended Consolidated Class Action Complaint (the “Complaint” or “Compl.”), (Doc. 84), of putative representatives of a nationwide Indirect Purchaser Plaintiff class (“Plaintiffs” or “Indirect Purchaser Plaintiffs”), under Federal Rules of Civil Procedure 12(b)(1) for lack of standing and 12(b)(6) for failure to state a claim, and Plaintiffs' Request for Judicial Notice, (Doc. 109). For the following reasons, Defendants' Motion to Dismiss is GRANTED IN PART and DENIED IN PART, and Plaintiffs' Request for Judicial Notice is DENIED.

I. BACKGROUND AND PROCEDURAL HISTORY

The facts (but not the conclusions) in the Complaint are assumed to be true for the purposes of this Opinion, Plaintiffs' claims arise from the manufacture and marketing of DDAVP, an antidiuretic, and its generic equivalents, called desmopressin acetate. (Compl. ¶ 1.) Ferring B.V. is a privately held company organized under the laws of the Netherlands, and Ferring Pharmaceuticals, Inc. is a New York corporation and a subsidiary of Ferring B.V. (collectively “Ferring”) that developed and manufactured DDAVP. ( Id. ¶ ¶ 17–18.) Ferring is the owner of U.S. Patent No. 5,407,398 (the “'398 patent”) that the Patent and Trademark Office (the “PTO”) issued on September 10, 1991, covering a gastrointestinally-absorbable tablet form of DDAVP. ( Id. ¶¶ 54, 69.) Previously, Ferring was the owner of two other patents related to DDAVP that had expired, and the inventions claimed therein had entered the public domain. ( Id. ¶¶ 50, 51, 54.) Aventis Pharmaceuticals, Inc. (“Aventis”) is a Delaware corporation to which Ferring licensed the exclusive right to market and sell the invention of the '398 patent in the United States. ( Id. ¶ 19.)

After the '398 patent issued, Defendants filed a new drug application (an “NDA”) with the United States Food and Drug Administration (the “FDA”), and the FDA listed the '398 patent in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” commonly known as the “Orange Book”( id. ¶¶ 34, 77), which provides notice concerning patents covering FDA-approved drugs, ( id. ¶ 34). When a generic drug manufacturer seeks to produce a generic version of a drug, it may submit an abbreviated new drug application (an “ANDA”) to the FDA to obtain such approval. ( Id. ¶ 39.) If a patent is listed in the Orange Book and a generic drug manufacturer believes that the patent is invalid or will not be infringed by the proposed generic drug, it must provide a “Paragraph IV certification” in connection with any ANDA that it files with the FDA. ( Id. ¶ 41.) The filing of a Paragraph IV certification is considered a technical act of patent infringement under 35 U.S.C. § 271(e)(2) upon which the branded drug manufacturer may institute a patent infringement lawsuit. ( Id. ¶ 43.) The filing of such a lawsuit in turn invokes a thirty-month stay of approval of the generic manufacturer's pending ANDA, thereby blocking entry of the generic competitor into the market. ( Id. ¶¶ 43, 45.)

In this case, Barr Laboratories (“Barr”) submitted ANDA No. 76–470 to obtain approval from the FDA to manufacture and sell a generic version of the tablet form DDAVP. ( Id. ¶ 83.) The ANDA contained a Paragraph IV certification in which Barr claimed that '398 patent was invalid because Ferring had committed inequitable conduct before the PTO (discussed below). ( Id.) On December 13, 2002, in response to Barr's Paragraph IV certification, Defendants filed a patent infringement suit in the Southern District of New York against Barr, and Barr was therefore stayed from entering the market for thirty months. ( Id. ¶ 85.) Similarly, on or about June 9, 2004, Teva Pharmaceuticals USA, Inc. (“Teva”) submitted a separate ANDA to sell a generic version of DDAVP, which included a Paragraph IV certification. ( Id. ¶¶ 98–99.) On June 20, 2004, Defendants filed a patent infringement lawsuit against Teva in the District of Delaware, which also subjected Teva to the thirty-month stay. ( Id. ¶¶ 100–01.)

The inequitable conduct to which Barr's and Teva's Paragraph IV certifications referred related to the following facts. The PTO had twice rejected Ferring's application for the '398 patent on grounds that the '398 patent would be obvious in light of Ferring's prior DDAVP patents, ( id. ¶¶ 58–64), which rejection was affirmed by the Board of Patent Appeals, ( id. ¶¶ 65–66). Ferring responded by filing an amendment after appeal, which it supported by five declarations that purported to be from “non-inventors,” each of whom affirmed to the PTO that the prior DDAVP patents did not teach the art in the '398 patent and thus render the '398 patent obvious. ( Id. ¶¶ 67–68.) In other words, Ferring submitted declarations from people purportedly unaffiliated with Ferring to the effect that the prior DDAVP patents did not make the '398 patent obvious and thus unworthy of patent protection. After the amendment addressing the PTO's concern regarding prior art, as to which the PTO had specifically asked for “non-inventor” evidence, ( id. ¶ 60), the PTO issued the '398 patent. ( Id. ¶ 69.) Unbeknownst to the PTO, however, three of the declarations were submitted by paid consultants of Ferring who failed to disclose their relationship with the company, despite the PTO's request for objective, non-inventor testimony. ( See id. ¶¶ 60, 70–76, 86.)

On February 7, 2005, the district court in Defendants' infringement suit against Barr granted summary judgment to Barr, and found the '398 patent unenforceable. ( Id. ¶ 87.) The district court determined that Ferring had deceived the PTO by submitting declarations to the PTO that purported to be made by “non-inventors,” when in fact the declarants had “close and undisclosed long-standing associations” with Ferring, and that without the declarations, the '398 patent would not have issued. ( Id. ¶¶ 87, 89);see Ferring B.V. v. Barr Labs., Inc, No. 02–CV–9851, 2005 WL 437981, at *9–10 (S.D.N.Y. Feb. 7, 2005). The United States Court of Appeals for the Federal Circuit affirmed the district court's decision on the patent's unenforceability, finding ample evidence of Ferring's intent to deceive the PTO. (Compl. ¶¶ 90–93); see Ferring B.V. v. Barr Labs., Inc., 437 F.3d 1181 (Fed.Cir.2006).

On February 2, 2004, during the time that Defendants were prosecuting their infringement claim against Barr, Ferring filed a citizen petition with the FDA, asking the FDA to mandate that all ANDAs seeking approval to market a generic version of DDAVP include more stringent evidentiary proofs of bioequivalence, including comparative clinical end-point studies in children and separate evidence of bioequivalence for each dose level. (Compl. ¶¶ 102, 104.) On July 1, 2005, the FDA denied Ferring's citizen petition, concluding that Ferring had not proffered evidence as to why the FDA should depart from its well-established methodologies to establish bioequivalence, and further determining that, in violation of 21 C.F.R. § 10.30 (requiring petitioner to certify that “petition includes all information and views on which the petition relies, and that it includes representative data and information known to the petitioner which are unfavorable to the petition”), Ferring had failed to cite an Aventis study that was inconsistent with the position advanced by Ferring in the citizen petition. (Id. ¶ 115.) On the same day, the FDA granted final approval of Barr's ANDA for generic DDAVP tablets, and Barr launched its generic DDAVP product on July 15, 2005. ( Id. ¶¶ 117–18.) As the first generic competitor to file a Paragraph IV certification, Barr had the exclusive right to market generic DDAVP for 180 days. ( Id. ¶¶ 46, 118.) Teva entered the market after the FDA approved its ANDA on January 25, 2006. (Id. ¶ 119.)

Meijer, Inc. and Meijer Distribution, Inc. filed a class action complaint in this case on February 18, 2005. (Doc. 1.) Subsequently, two classes of plaintiffs the Direct Purchaser Plaintiff class (the “Direct Purchaser Plaintiffs”) and the Indirect Purchaser Plaintiffs (collectively the “Plaintiff classes”)—filed consolidated class action complaints on April 5, 2006. (Docs. 28, 29.) Defendants filed a joint motion to dismiss the claims of both Plaintiff classes on May 1, 2006, ( see Doc. 32), and Aventis separately moved to dismiss the complaints against it for failure to plead fraud with particularity, ( see Doc. 35), (collectively, the “first motions to dismiss”). Judge Charles Brieant, to whom the case was then assigned, granted the first motions to...