Silbersher v. Allergan Inc., Case No. 18-cv-03018 JCS
| Decision Date | 11 December 2020 |
| Docket Number | Case No. 18-cv-03018 JCS |
| Citation | 506 F.Supp.3d 772 |
| Parties | Zachary SILBERSHER, et al., Plaintiffs, v. ALLERGAN INC., et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Nicomedes Sy Herrera, Laura E. Seidl, Herrera Purdy LLP, Oakland, CA, Andrew Michael Purdy, Pro Hac Vice, Bret Douglas Hembd, Herrera Purdy LLP, Newport Beach, CA, Charles Jacob Gower, Pro Hac Vice, Burns Charest, New Orleans, LA, Christopher Cormier, Pro Hac Vice, Burns Charest LLP, Washington, DC, Tejinder Singh, Goldstein and Russell, P.C., Bethesda, MD, Warren Tavares Burns, Pro Hac Vice, Burns Charest LLP, Dallas, TX, for Plaintiff Zachary Silbersher.
Michelle Lo, Sara Winslow, Jennifer S. Wang, United States Attorney's Office Northern District of California, San Francisco, CA, for Plaintiff United States of America.
David Bruce Zlotnick, California Department of Justice, San Diego, CA, for Plaintiffs States of California, State of Colorado, State of Connecticut, State of Delaware, State of Florida, State of Georgia, State of Hawaii, State of Illinois, State of Indiana, State of Iowa, State of Louisiana, State of Maryland, State of Michigan, State of Minnesota, State of Montana, State of Nevada, State of New Jersey, State of New Mexico, State of New York, State of North Carolina, State of Oklahoma, State of Rhode Island, State of Tennessee, State of Texas, State of Vermont, State of Washington, the Commonwealth of Massachusetts, the Commonwealth of Virginia, the District of Columbia.
Nicholas George Campins, California Department of Insurance, Oakland, CA, for Plaintiff State of California, through California Insurance Commissioner.
Michael Sean Royall, Olivia Arden Adendorff, Pro Hac Vice, Kirkland & Ellis, LLP, Dallas, TX, Emma M. Strong, Gibson, Dunn & Crutcher LLP, Palo Alto, CA, John D. W. Partridge, Gibson Dunn and Crutcher LLP, Denver, CO, for Defendants Allergan Inc., Allergan USA, Inc., Allergan Sales, LLC, Forest Laboratories Holdings, Ltd.
Lisa Tenorio-Kutzkey, DLA Piper LLP (US), San Francisco, CA, Andrew James Hoffman, II, Anthony Louis Portelli, DLA Piper LLP (US), Los Angeles, CA, Matthew A. Holian, DLA Piper LLP (US), Boston, MA, for Defendants Adamas Pharma LLC, Adamas Pharmaceuticals, Inc.
ORDER DENYING MOTIONS TO DISMISS AND SETTING CASE MANAGEMENT CONFERENCE FOR JANUARY 15, 2021 AT 2:00 PM
This action is brought under the federal False Claims Act ("FCA"), 31 U.S.C. §§ 3729 - 3733, by Plaintiff-Relator Zachary Silbersher ("Relator") on behalf of the United States and numerous States (the "States")1 against two sets of defendants: 1) the "Allergan Defendants" or "Allergan"2 ; and 2) the "Adamas Defendants" or "Adamas."3 Each set of defendants brings a motion to dismiss (hereinafter, the "Allergan Motion" and the "Adamas Motion" and collectively, the "Motions"). For the reasons stated below, the Motions are DENIED.4
The operative complaint in this action is the First Amended Complaint ("FAC"). In the FAC, Relator alleges that the Adamas and Allergan Defendants misled the United States Patent Office ("Patent Office") into issuing invalid patents protecting the drugs Namenda XR® and Namzaric®, thus perpetuating their monopoly power and allowing them to overcharge the federal government and the States for these drugs under various programs, including Medicare and Medicaid. FAC ¶¶ 1-8.
Relator is a citizen of the State of New York whose "profession focuses on investigating invalid pharmaceutical patents that brand manufacturers use to protect their drugs from price competition." Id. ¶ 9. He alleges that he has "[t]hrough his independent investigation ... uncovered non-public information supporting the claims set forth" in the FAC. Id. He further alleges that his "independent research and investigation has generated information that is independent of, and materially adds to, any publicly-disclosed allegations and transactions." Id. According to Relator, he is an "original source" of information within the meaning of the FCA and he provided the information on which his claims are based to the States and the federal government before he initiated this action. Id. ¶ 10.
Relator alleges that Allergan, Inc., Allergan USA, Inc., Allergan Sales, LLC, and Forest Laboratories Holdings, Ltd. are subsidiaries or divisions of Allergan PLC, which was called Activas PLC until June 15, 2015. Id. ¶ 17. Activas PLC acquired Forest Laboratories, Inc. on July 1, 2014 and acquired Allergan, Inc. on March 17, 2015. Id. ¶¶ 17, 49. Relator alleges that "Defendant Forest Laboratories Holdings, Ltd. is an Irish corporation with its principal place of business at Cumberland House, 1 Victoria Street, Hamilton HMU, Bermuda" and that "Allergan is the successor-in-interest to Forest Laboratories, LLC (f/k/a Forest Laboratories, Inc.) and is liable for any damages to which Forest is liable." Id. ¶ 16.5
Defendant Adamas Pharma, LLC is a Delaware limited liability company with its principal place of business in Emeryville, California; Defendant Adamas Pharmaceuticals, Inc. is a Delaware corporation, also based in Emeryville, California. Id. ¶¶ 18-19. According to Relator, in 2012, Adamas Pharmaceuticals, Inc. entered into a commercialization and development agreement with Forest Laboratories, Inc. with respect to memantine hydrochloride ("memantine") drugs. Id. ¶¶ 50, 59. Relator alleges that "[a]s part of that agreement, Adamas ... granted Forest an exclusive license to all of the Went Patents[,]" discussed below. Id.
Namenda XR® is a delayed-release drug whose active pharmaceutical ingredient ("API") is memantine. Id. ¶ 50. It is used to treat patients with dementia related to Alzheimer's disease. Id. According to Relator, generics of Namenda XR® first became available on February 21, 2018, after the Federal Circuit invalidated patents asserted by Defendants in connection with that drug. Id. Relator alleges that Allergan's United States net revenue for Namenda XR® was approximately $452.8 million in 2017, $627.6 million in 2016 and $759.3 million in 2015. Id. ¶ 52.
Namzaric® is also a delayed-release drug prescribed to treat patients with dementia related to Alzheimer's disease. Id. ¶ 53. It has two APls: memantine hydrochloride and donepezil hydrochloride. Id. ¶ 54. Relator alleges that "[g]eneric manufacturers have been ready to enter the market since at least July 13, 2015, but they have been prevented from doing so by the fraudulently-obtained patents asserted by Defendants" and that "[t]o date, no generic manufacturer has entered the market for Namzaric®." According to Relator, Allergan launched Namzaric® on May 18, 2015; its net revenue for Namzaric® was approximately $130.8 million in 2017, $57.5 million in 2016 and $11.2 [million] in 2015." Id. ¶ 56.
Relator alleges that "Defendants listed three categories of patents for Namenda XR® and Namzaric® in the [Food and Drug Administration ("FDA")]’s database of "Approved Drug Products with Therapeutic Equivalence Evaluations," commonly known as the "Orange Book[,]" thereby preventing generic manufacturer's from entering the market. FAC ¶ 57.
The first category of patents is the Went Patents, a group of eleven patents that list Dr. Gregory T. Went, PhD., the founder and CEO of Adamas, as the first inventor.6 Id. ¶ 58. For Namenda XR®, six of the Went Patents are listed in the Orange Book (the ’209, ’708, ’379, ’752, ’085, and ’233 patents ), while all eleven are listed for Namzaric®. Id. According to Relator, the Went Patents "are all generally directed to an extended release formulation for memantine." Id.
The parent patent for all of the Went Patents is the ’291 patent, which was issued on November 15, 2011. Id. ¶ 61. Relator alleges that on June 21, 2010, during prosecution of the ’291 patent application, the Examiner issued an Office Action that rejected the pending claims as anticipated. Id. ¶ 62. In response, on November 5, 2010, Dr. Went and his co-inventors amended the independent claims of the ’291 patent application and submitted a declaration by Dr. Went (the "Original Went Declaration" or "2010 Went Declaration") in which he discussed the results of two clinical studies conducted by Adamas, the C106 Study and the ME110 Study. Id. ¶ 63. Relator alleges that Dr. Went misrepresented the results of these studies in his declaration, asserting that they showed "no incidence" of certain side effects when in fact, the opposite was true. Id. ¶¶ 66-69, 73. According to Relator, on September 23, 2011, the Examiner allowed the claims based upon the alleged "unexpected results" sworn to by Dr. Went in this declaration. Id. ¶ 73.
Relator alleges that Dr. Went and Adamas continued to resubmit the same fraudulent data and did not correct these misrepresentations when applying for nine additional patents, misleading the Patent Office into granting the applications based on them. Id. ¶¶ 73-90. However, Relator alleges, during prosecution of U.S. Patent Application No. 12/757,824 ("the ’824 Application"), on May 7, 2012, Dr. Went submitted another declaration ("the 2012 Went Declaration") in which he again described the ME110 Study but provided a table of actual results and stated that they showed "little incidence" (rather than "no incidence") of side effects with the extended release formulation. Id. ¶¶ 68-69. That application was rejected by the Examiner on the basis that the extended release formulation that it claimed did "not present better results in regards to side effects." Id. ¶ 70. Adamas then abandoned that application. Id. According to Relator, Adamas continued to rely on the Original Went Declaration or slightly modified versions of that declaration that continued to misrepresent the results of the ME110 Study and the Examiner continued to allow the patents for the same reasons it allowed the ’291 patent. Id. ¶¶ 74-84.
The second "category of patents" listed for Namenda XR®...
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