Antitrust Law Daily Rejection of consumer class of Intuniv purchasers stands in ‘pay-for-delay’ suit
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Thursday, November 7, 2019

Rejection of consumer class of Intuniv purchasers stands in ‘pay-for-delay’ suit

By Jeffrey May, J.D.

IPPs argued that a subclass of consumers "who bought brand Intuniv or generic Guanfacine ER with cash or co-insurance" should have been certified to challenge allegedly anticompetitive patent litigation settlement agreement between Shire and Actavis.

The federal district court in Boston refused to modify its denial of class certification in an antitrust action brought on behalf of consumers who were allegedly overcharged for ADHD drug Intuniv or generic Guanfacine ER as a result of an anticompetitive patent litigation settlement agreement between Intuniv’s manufacturer—Shire LLC—and generic equivalent makers Actavis Holdco US Inc. and Actavis Elizabeth LLC. Named plaintiffs argued that if the court were concerned about including unharmed indirect purchasers plaintiffs (IPPs), it should only have excluded consumers who purchased brand Intuniv with a co-pay and narrowed the class, instead of denying class certification. However, the court explained that: (1) the IPPs had not previously proposed a class of consumers who purchased brand Intuniv with co-insurance or cash (excluding consumers who purchased with a co-pay), and the court was not required to create a workable class after the plaintiffs failed to carry their burden; (2) the IPPs failed to demonstrate that the named plaintiffs were actually cash-payers or co-insurance users who purchased Intuniv and would be adequate representatives of the newly proposed class; and (3) the narrower class would still include the uninjured class members, such as coupon users and consumers who had reached their out-of-pocket maximums (In re Intuniv Antitrust Litigation, November 6, 2019, Burroughs, A.).

The IPPs claimed that the settlement agreement between Shire and Actavis improperly delayed competition for both brand Intuniv and generic Intuniv, thereby causing them to pay an inflated price for the drug. They alleged that Shire, which held three supposedly weak patents on Intuniv at the time, responded to Actavis’s filing of an Abbreviated New Drug Application (ANDA) for generic Intuniv in December 2009 by filing a patent infringement suit against the company and eventually several other ANDA filers. According to the plaintiffs, Shire ultimately engineered settlements with the others that threatened Actavis with the prospect of competition during its 180-day exclusivity period, so Shire then entered into a settlement agreement with Actavis that guaranteed those 180 days in exchange for a delay in generic launch, which allowed Shire to continue enjoying monopoly profits for brand Intuniv in the interim. As a result, they claimed that they were forced to pay artificially high prices for both the branded and generic forms of the drug. A separate action is being pursued by direct purchasers.

The IPPs moved for class certification of a nationwide class and a class of consumers from the 26 jurisdictions that have Illinois Brick repealer laws, statutes explicitly permitting indirect purchasers to recover monetary damages for violations of their antitrust laws. The court denied the motion in August, concluding that the IPPs failed to "weed out" uninjured class members. The IPPs moved for reconsideration and petitioned for interlocutory appeal. Rather than stay the proceeding pending the interlocutory appeal, the district court decided to deny the motion and provide a "clean jurisdictional record to the court of appeals."

The district court rejected the plaintiffs' argument that it did not understand their proposed class. According to the court, the IPPs had not proposed a class of consumers who purchased brand Intuniv with co-insurance or cash. The court also noted that the plaintiffs "provided no caselaw to support the notion that district courts must sua sponte create a workable class after plaintiffs have failed to carry their burden."

Concerns about whether the named plaintiffs could adequately represent the modified class also persisted. The defendants pointed out that each named plaintiff had previously testified that he or she purchased brand or generic Intuniv by paying a co-pay while insured. Lastly, the narrower class would still potentially include uninjured members, in the court's view.

The case is No. 1:16-cv-12396-ADB.

Attorneys: Allan Kanner (Allan Kanner & Associates, P.L.L.C.) for Tina Picone. Amanda J. Hamilton (Haug Partners LLP) for Shire U.S. Inc. and Shire LLC. Aviv A. Zalcenstein (Goodwin Procter LLP) for Actavis Elizabeth LLC and Actavis Inc.

Companies: Shire U.S. Inc.; Shire LLC; Actavis Elizabeth LLC; Actavis Inc.

MainStory: TopStory Antitrust MassachusettsNews

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