Antitrust Law Daily Novartis compelled to release documentation in monopolization case against Ranbaxy
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Wednesday, September 9, 2020

Novartis compelled to release documentation in monopolization case against Ranbaxy

By Stephanie K. Mann, J.D.

Third party Novartis ordered to produce profit margins and forecasts for the authorized generic product launch of blood pressure medication Diovan. Underlying suit alleged Ranbaxy’s conduct wrongly extended Novartis’s market power over Diovan.

Pharmaceutical company Novartis Pharmaceuticals Corporation (NPC) has been ordered to produce documentation regarding profit margins and forecasts for an authorized generic product launch in an ongoing attempted monopolization case by the federal district court in Boston. Because the pharmaceutical company would be able to obtain the profit margins easily, the documents would be protected since only the attorneys involved in the case would have access to the documentation, and the information could be a key piece to establishing a monopoly, the court granted the Third-Party Motion to Compel. The forecast data was determined to be necessary as it could assist the court in calculating the impact of varying members of generic entrants and damages (In re Ranbaxy Generic Drug Application Antitrust Litigation, September 8, 2020, Gorton, N.).

In an underlying action, the plaintiffs alleged that Ranbaxy, a generic drug manufacturer, fraudulently obtained first-to-file generic exclusivity from the Food and Drug Administration for three drugs, including generic Diovan. This exclusivity would allow Ranbaxy to block all other generic drug manufacturers from entering the market, causing consumers to pay supra-competitive prices for the drugs in violation of the Sherman Act. As a result of a settlement agreement in the related patent litigation, Ranbaxy agreed not to launch generic Diovan until September 21, 2012. However, due to manufacturing deficiencies, it failed to launch the product until July 2014. Ranbaxy’s 180-exclusivity period ended on January 5, 2015, and other generic manufacturers launched their products immediately thereafter.

Meijer alleged that the profit margin data that it was seeking was crucial to its market power analysis and key to "establishing the first element of its monopolization claim by providing evidence that Ranbaxy’s conduct had actual detrimental effects on the [generic Diovan] market." According to the motion to compel, Meijer argued that the documents that it sought were "highly relevant, easily collected, and not obtainable from any party to the case." NPC’s objection stated that these materials are a closely guarded trade secret, unduly burdensome, and irrelevant to the present case.

At the outset, the court determined that obtaining the profit margin data would not be unduly burdensome due to the size and sophistication of the pharmaceutical company. Secondly, although NPC made a "convincing case" that the profit margin data qualified as a trade secret, the court found that since the material will be protected by a two-tier protective order that limits the review of the information to attorneys only, Meijer sufficiently demonstrated a substantial need for the data that "cannot otherwise be met without undue hardship."

The court agreed with Meijer that the profit margin data was a key component of Meijer’s monopolization claim. Because it was anticipated that market power and the relevant market will be highly contested issues in this case, Meijer stated that it intended to use the documents to demonstrate that Ranbaxy blocked all generics from entering in 2012, it caused "consumers to pay supra-competitive prices for brand Diovan, resulting in financial harm to consumers."

Additionally, the court granted the motion to compel for all documents pertaining to NPC’s forecasts concerning its planned launch of generic Diovan. The court believed that this documentation was relevant to calculating the impact of varying members of generic entrants and damages, and will establish NPC’s plans concerning meeting the potential launch of generics starting in 2012 with its own launch of an authorized generic.

The case is No. 19-md-02878-NMG.

Attorneys: Alfred Luke Smith (Radice Law Firm, PC) and Eamon P. Kelly (Sperling & Slater PC) for Meijer, Inc. Alexandra I. Russell (Kirkland & Ellis, LLP) and Emily Kanstroom Musgrave (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC) for Ranbaxy, Inc. and Sun Pharmaceutical Industries Ltd. Kevin C. Adam (White & Case, LLP) for Novartis Pharmaceuticals Corp.

Companies: Meijer, Inc.; Sun Pharmaceutical Industries Ltd.; Ranbaxy, Inc.; Novartis Pharmaceuticals Corp.

MainStory: TopStory Antitrust GCNNews MassachusettsNews

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