In re: LIPITOR ANTITRUST LITIGATION RITE AID CORPORATION; RITE AID HDQTRS CORPORATION; JCG (PJC) USA, LLC; MAXI DRUG, INC. d/b/a Brooks Pharmacy; ECKERD CORPORATION, Appellants in No. 14-4202 WALGREEN COMPANY; THE KROGER COMPANY; SAFEWAY, INC.; SUPERVALU, INC.; HEB GROCERY COMPANY L.P., Appellants in No. 14-4203 GIANT EAGLE, INC., Appellant in No. 14-4204 MEIJER INC.; MEIJER DISTRIBUTION, INC., Appellants in No. 14-4205 ROCHESTER DRUG CO-OPERATIVE, INC.; STEPHEN L. LAFRANCE PHARMACY, INC. d/b/a SAJ DISTRIBUTORS; BURLINGTON DRUG COMPANY, INC.; VALUE DRUG COMPANY; PROFESSIONAL DRUG COMPANY, INC.; AMERICAN SALES COMPANY LLC, Appellants in No. 14-4206 A.F.L.-A.G.C. BUILDING TRADES WELFARE PLAN; MAYOR AND CITY COUNCIL OF BALTIMORE, MARYLAND; NEW MEXICO UNITED FOOD AND COMMERCIAL WORKERS UNION'S AND EMPLOYERS' HEALTH AND WELFARE TRUST FUND; LOUISIANA HEALTH SERVICE INDEMNITY COMPANY, d/b/a BLUE CROSS/BLUE SHIELD OF LOUISIANA; BAKERS LOCAL 433 HEALTH FUND; TWIN CITIES BAKERY WORKERS HEALTH AND WELFARE FUND; FRATERNAL ORDER OF POLICE, FORT LAUDERDALE LODGE 31, INSURANCE TRUST FUND; INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL 98; NEW YORK HOTEL TRADES COUNSEL & HOTEL ASSOCIATION OF NEW YORK CITY, INC., HEALTH BENEFITS FUND; EDWARD CZARNECKI; EMILIE HEINLE; FRANK PALTER; ANDREW LIVEZEY; EDWARD ELLENSON; JEAN ELLYNE DOUGAN; NANCY BILLINGTON, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, Appellants in No. 14-4602 IN RE: EFFEXOR XR ANTITRUST LITIGATION WALGREEN, CO.; THE KROGER, CO.; SAFEWAY, INC.; SUPERVALU, INC.; HEB GROCERY COMPANY LP; AMERICAN SALES COMPANY, INC., Appellants in No. 15-1184 RITE AID CORPORATION; RITE AID HDQTRS., CORPORATION; JCG (PJC) USA, LLC; MAXI DRUG, INC. d/b/a BROOKS PHARMACY; ECKERD CORPORATION; CVS CAREMARK CORPORATION, Appellants in No. 15-1185 GIANT EAGLE, INC., Appellant in No. 15-1186 MEIJER, INC.; MEIJER DISTRIBUTION, INC., Appellants in No. 15-1187 PROFESSIONAL DRUG COMPANY, INC.; ROCHESTER DRUG CO-OPERATIVE, INC.; STEPHEN L. LAFRANCE HOLDINGS, INC.; STEPHEN L. LAFRANCE PHARMACY, INC. d/b/a SAJ DISTRIBUTORS; UNIONDALE CHEMIST, INC., Appellants in No. 15-1274 PAINTERS DISTRICT COUNCIL NO. 30 HEALTH & WELFARE FUND; MEDICAL MUTUAL OF OHIO, Appellants in No. 15-1323 A.F. of L.-A.G.C. BUILDING TRADES WELFARE PLAN; DARYL DEINO; IBEW-NECA LOCAL 505 HEALTH & WELFARE PLAN; LOUISIANA HEALTH SERVICE INDEMNITY COMPANY d/b/a BLUE CROSS/BLUE SHIELD OF LOUISIANA; MAN-U SERVICE CONTRACT TRUST FUND; MC-UA LOCAL 119 HEALTH & WELFARE PLAN; NEW MEXICO UNITED FOOD AND COMMERCIAL WORKERS UNION'S AND EMPLOYERS' HEALTH AND WELFARE TRUST FUND; PLUMBERS AND PIPEFITTERS LOCAL 572 HEALTH AND WELFARE FUND; SERGEANTS BENEVOLENT ASSOCIATION HEALTH AND WELFARE FUND; PATRICIA SUTTER (TOGETHER “END-PAYOR CLASS PLAINTIFFS”) ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, Appellants in No. 15-1342
May 19, 2017
Appeal from the United States District Court for the District
of New Jersey (MDL 2332) / (D.N.J. No. 3-12-cv-02389) /
(D.N.J. No. 3-12-cv-02478) / (D.N.J. No. 3-12-cv-04115) /
(D.N.J. No. 3-12-cv-04537) / (D.N.J. No. 3-12-cv-05129) /
(D.N.J. No. 3-12-cv-06774) / (D.N.J. No. 3-12-cv-07561) /
(D.N.J. No. 3-11-cv-05479) / (D.N.J. No. 3-11-cv-05590) /
(D.N.J. No. 3-11-cv-05661) / (D.N.J. No. 3-11-cv-06985) /
(D.N.J. No. 3-11-cv-07504) / (D.N.J. No. 3-12-cv-03116) /
(D.N.J. No. 3-12-cv-03523) District Judge: The Honorable
Peter G. Sheridan
L. Kiley Hangley Aronchick Segal Pudlin & Schiller
Maureen S. Lawrence Barry L. Refsin [ARGUED] Hangley
Aronchick Segal Pudlin & Schiller Counsel for Appellants
Rite Aid Corp., Rite Aid Hdqtrs. Corp., Maxi Drug Inc.,
Eckerd Corp. and JCG (PJC) USA LLC.
T. Neill Scott E. Perwin [ARGUED] Lauren C. Ravkind Kenny
Nachwalter, P.A. Counsel for Appellants Walgreen Co., Kroger
Co., Safeway Inc., Supervalu, Inc., HEB Grocery Co. LP and
American Sales Co. LLC.
P. Germaine Joseph M. Vanek Vanek, Vickers & Masini, P.C.
Moira Cain-Mannix Bernard D. Marcus Erin G. Allen Marcus
& Shapira LLP One Oxford Centre 35th Floor Pittsburgh, PA
15219 Counsel for Appellant Giant Eagle, Inc.
Bradley J. Demuth, Linda P. Nussbaum, Nussbaum Law Group P.C.
David P. Germaine Joseph M. Vanek Vanek Vickers & Masini
Counsel for Appellants Meijer, Inc. and Meijer Distribution.
Gregory T. Arnold Kristen A. Johnson Kristie A. LaSalle
Thomas M. Sobol [ARGUED] Hagens Berman Sobol & Shapiro
LLP Caitlin Coslett Eric L. Cramer Jennifer MacNaughton
Daniel Simons David F. Sorensen [ARGUED] Richard D. Schwartz
Berger & Montague, P.C., Elena K. Chan Bruce E. Gerstein
[ARGUED] Kimberly Hennings Garwin Gerstein & Fisher LLP
Peter Kohn Richard D. Schwartz Faruqi & Faruqi LLP Miles
Greaves Barry S. Taus Taus Cebulash & Landau, LLP, Erin
C. Burns Dianne M. Nast NastLaw LLC Don Barrett Barrett Law
Group Counsel for Appellants Direct-Purchaser Class
Plaintiffs Rochester Drug Co-Operative, Inc., et al.
E. Cecchi [ARGUED] Lindsey H. Taylor Carella, Byrne, Cecchi,
Olstein, Brody, & Agnello, P.C. Peter S. Pearlman Cohn
Lifland Pearlman Herrmann & Knopf LLP Liaison Counsel for
Appellants Direct-Purchaser Class Plaintiffs Rochester Drug
Co-Operative, Inc., et al.
N. Boley Bethany R. Turke Kenneth A. Wexler Wexler Wallace
LLP James W. Anderson Vincent J. Esades Renae Steiner David
R. Woodward [ARGUED] Heins Mills & Olson, P.L.C. J.
Douglas Richards Sharon K. Robertson Cohen Milstein Sellers
& Toll, PLLC Michael M. Buchman Alex Straus, Esq. Motley
Rice LLC, Jeffrey L. Kodroff John A. Macoretta Spector
Roseman Kodroff & Willis Counsel for Appellants End-Payor
Class Plaintiffs AFL-AGC Building Trades Welfare Plan, et al.
J. Rodriguez, Schnader Harrison Segal & Lewis LLP
Woodland Falls Corporate Park Liaison Counsel for Appellants
End-Payor Class Plaintiffs AFL-AGC Building Trades Welfare
Plan, et al.
M. Alioto Jamie L. Miller Theresa Driscoll Moore Alioto Law
Firm Timothy A.C. May Gil D. Messina Messina Law Firm, P.C.
Lori A. Fanning Marvin A. Miller Matthew E. Van Tine Miller
Law LLC Kevin P. Roddy, Wilentz, Goldman & Spitzer, P.A.
Mark S. Sandmann Hill Carter Franco Cole & Black, P.C.
Counsel for Appellants Painters District Council No. 30
Health & Welfare Fund and Medical Mutual of Ohio.
D. Shadowen Hilliard & Shadowen LLP Michael A. Carrier
Rutgers Law School Counsel for 48 Law, Economics, and
Business Professors and the American Antitrust Institute as
Amici Curiae in support of Appellants.
Jonathan E. Nuechterlein, Former General Counsel David C.
Shonka, Acting General Counsel Joel Marcus, Director of
Litigation Michele Arington, Assistant General Counsel
Deborah L. Feinstein, Director Markus H. Meier, Acting Deputy
Director Bradley S. Albert, Deputy Assistant Director
Elizabeth R. Hilder Heather Johnson Jamie R. Towey Counsel
for Federal Trade Commission as Amicus Curiae in support of
Dimitrios T. Drivas Raj S. Gandesha Bryan D. Gant Sheryn E.
George Robert A. Milne [ARGUED] Brendan G. Woodard Amy E.
Boddorff White & Case LLP Liza M. Walsh Eleonore
Ofosu-Antwi Walsh Pizzi O'Reilly & Falanga Counsel
for Appellees Pfizer, Inc., Pfizer Ireland Pharmaceuticals,
Warner- Lambert Company, Warner-Lambert Company LLC, Wyeth,
Inc., Wyeth Pharmaceuticals, Inc., Wyeth-Whitehall
Pharmaceuticals LLC and Wyeth Pharmaceuticals Company.
Jonathan D. Janow John C. O'Quinn Gregory L. Skidmore
Edwin J. U Karen N. Walker Kirkland & Ellis LLP Jay P.
Lefkowitz, [ARGUED] Joseph Serino, Jr. Steven J. Menashi
Kirkland & Ellis LLP Counsel for Appellees Ranbaxy, Inc.,
Ranbaxy Pharmaceuticals, Inc., Ranbaxy Laboratories Ltd.,
Teva Pharmaceutical Industries Ltd. and Teva Pharmaceuticals
Katherine A. Helm Noah M. Leibowitz Simpson Thacher &
Bartlett LLP Victor E. Schwartz Philip S. Goldberg Cary
Silverman Shook, Hardy & Bacon L.L.P. Counsel for
American Tort Reform Association and Pharmaceutical Research
and Manufacturers of America as Amici Curiae in support of
Jonathan D. Hacker Edward Hassi O'Melveny & Myers LLP
Counsel for Antitrust Economists as Amici Curiae in support
Bass Stephen Bartenstein Andrew D. Lazerow Covington &
Burling LLP Counsel for Pharmaceutical Research and
Manufacturers of America as Amicus Curiae in support of
Chamcharas Peter J. Curtin William A. Rakoczy Molino Mazzochi
& Siwik LLP Brian T. Burgess Goodwin Procter LLP
Christopher T. Holding Goodwin Procter LLP Counsel for
Generic Pharmaceutical Association as Amicus Curiae in
support of Appellees.
Before: SMITH, Chief Judge, AMBRO, and FISHER, Circuit Judges
opinion addresses two sets of consolidated appeals concerning
two pharmaceutical drugs: Lipitor and Effexor XR. In both
sets of consolidated appeals, plaintiffs allege that the
companies holding the patents related to Lipitor and Effexor
XR fraudulently procured and enforced certain of those
patents. Plaintiffs further allege that those companies
holding the patents entered into unlawful, monopolistic
settlement agreements with potential manufacturers of generic
versions of Lipitor and Effexor XR. The same District Court
Judge dismissed the complaints in the Lipitor litigation and
dismissed certain allegations in the Effexor litigation.
Those decisions relied on plausibility determinations that
are now challenged on appeal.
begin with a brief summary of the relevant regulatory scheme
applicable to pharmaceutical drugs and then detail the
factual and procedural backgrounds of these two sets of
consolidated appeals. The remainder of the opinion broadly
covers two issues. First, in F.T.C. v. Actavis,
Inc., 133 S.Ct. 2223 (2013), the Supreme Court concluded
that payments from patentees to infringers through
"reverse payment settlement agreements" are subject
to antitrust scrutiny. Id. at 2227. In both sets of
consolidated appeals, plaintiffs allege that the companies
holding the pharmaceutical patents and the generic
manufacturers entered into such agreements. We are asked to
decide whether those allegations are plausible. We conclude,
as to both sets of appeals, that they are. Second, regarding
only the Lipitor consolidated appeals, we address whether
plaintiffs in those appeals pled plausible allegations of
fraudulent patent procurement and enforcement, as well as
other related misconduct. We again determine that those
allegations are indeed plausible. Accordingly, we will
reverse the District Court's dismissal of the complaints
in the Lipitor litigation, reverse its dismissal of the
allegations in the Effexor litigation, and remand for further
1984 Drug Price Competition and Patent Term Restoration Act
(the "Hatch-Waxman Act"), 98 Stat. 1585, as
amended, provides a regulatory framework designed in part to
(1) ensure that only rigorously tested pharmaceutical drugs
are marketed to the consuming public, (2) incentivize drug
manufacturers to invest in new research and development, and
(3) encourage generic drug entry into the marketplace. As we
have noted previously, the Hatch-Waxman Act contains four key
relevant features. See In re Lipitor Antitrust
Litig., 855 F.3d 126, 135 (3d Cir. 2017) (Lipitor
III), as amended (Apr. 19, 2017); King Drug
Co. of Florence v. Smithkline Beecham Corp., 791 F.3d
388, 394 (3d Cir. 2015), cert. denied, 137 S.Ct. 446
the Hatch-Waxman Act requires a drug manufacturer wishing to
market a new brand-name drug to first submit a New Drug
Application ("NDA") to the Food and Drug
Administration ("FDA"), see 21 U.S.C.
§ 355, and then undergo a long, complex, and costly
testing process, see 21 U.S.C. § 355(b)(1)
(requiring, among other things, "full reports of
investigations" into safety and effectiveness; "a
full list of the articles used as components"; and a
"full description" of how the drug is manufactured,
processed, and packed). If this process is successful, the
FDA may grant the drug manufacturer approval to market the
after that approval, a generic manufacturer can obtain
similar approval by submitting an Abbreviated New Drug
Application ("ANDA") that "shows that the
generic drug has the same active ingredients as, and is
biologically equivalent to, the brand-name drug."
Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566
U.S. 399, 405 (2012) (citing 21 U.S.C. §§
355(j)(2)(A)(ii), (iv)). This way, a generic manufacturer
does not need to undergo the same costly approval procedures
to develop a drug that has already received FDA approval.
Actavis, 133 S.Ct. at 2228 ("The Hatch-Waxman
process, by allowing the generic to piggy-back on the
pioneer's approval efforts, 'speed[s] the
introduction of low-cost generic drugs to market, '
Caraco, [566 U.S. at 405], thereby furthering drug
competition." (first alteration in original)).
foreseeing the potential for conflict between brand-name and
generic drug manufacturers, the Hatch-Waxman Act "sets
forth special procedures for identifying, and resolving,
related patent disputes." Id. The Hatch-Waxman
Act, as well as federal regulations, requires brand-name drug
manufacturers to file information about their patents with
their NDA. Id. The brand-name manufacturer "is
required to list any patents issued relating to the
drug's composition or methods of use." Lipitor
III, 855 F.3d at 135. That filing must include the
patent number and expiration date of the patent. See
Caraco, 566 U.S. at 405 (quoting 21 U.S.C. §
355(b)(1)). Upon approval of the brand-name
manufacturer's NDA, the FDA publishes the submitted
patent information in its "Orange Book, " more
formally known as the Approved Drug Products with Therapeutic
Equivalence Evaluations. Id. at 405-06.
patent has been listed in the Orange Book, the generic
manufacturer is free to file an ANDA if it can certify that
its proposed generic drug will not actually violate the brand
manufacturer's patents. Id. at 405; see also
id. (The FDA "cannot authorize a generic drug that
would infringe a patent."). A generic manufacturer's
ANDA certification may state:
(I) that such patent information has not been filed,
(II) that such patent has expired,
(III). . . the date on which such patent will expire, or
(IV) that such patent is invalid or will not be infringed by
the manufacture, use, or sale of the new drug for which the
application is submitted.
21 U.S.C. § 355(j)(2)(A)(vii). "The 'paragraph
IV' route, automatically counts as patent infringement
. . . ." Actavis, 133 S.Ct. at 2228 (citing 35
U.S.C. § 271(e)(2)(A)). As a result, a paragraph IV
certification often "means provoking litigation"
instituted by the brand manufacturer. Caraco, 566
U.S. at 407.
brand-name manufacturer initiates a patent infringement suit
within 45 days of the ANDA filing, the FDA must withhold
approval of the generic for at least 30 months while the
parties litigate the validity or infringement of the patent.
Actavis, 133 S.Ct. at 2228 (citing 21 U.S.C. §
355(j)(5)(B)(iii)). If a court decides the infringement claim
within this 30-month period, then the FDA will follow that
determination. Id. However, if the litigation is
still proceeding at the end of the 30-month period, the FDA
may give its approval to the generic drug manufacturer to
begin marketing a generic version of the drug. Id.
The generic manufacturer then has the option to launch
"at risk, " meaning that, if the ongoing court
proceeding ultimately determines that the patent was valid
and infringed, the generic manufacturer will be liable for
the brand-name manufacturer's lost profits despite the
FDA's approval. See King Drug Co., 791 F.3d at
to incentivize generic drug manufacturers to file an ANDA
challenging weak patents, the Hatch-Waxman Act provides that
the first generic manufacturer to file a paragraph IV
certification will enjoy a 180-day exclusivity period. 21
U.S.C. § 355(j)(5)(B)(iv). This exclusivity period
prevents any other generic from competing with the brand-name
drug, see Actavis, 133 S.Ct. at 2229, which is an
opportunity that can be "worth several hundred million
dollars, " to the first-ANDA filer, id.
(quoting C. Scott Hemphill, Paying for Delay:
Pharmaceutical Patent Settlement as a Regulatory Design
Problem, 81 N.Y.U. L. Rev. 1553, 1579 (2006)). This
180-day exclusivity period belongs only to the first generic
manufacturer to file an ANDA; if the first-ANDA filer
forfeits its exclusivity rights, no other generic
manufacturer is entitled to it. Id. (citing 21
U.S.C. § 355(j)(5)(D)). Importantly, the brand-name
manufacturer is not barred from entering the generic market
with its own generic version of the drug-a so-called
"authorized generic"-during the 180-day exclusivity
period. See Lipitor III, 855 F.3d at 135-36 (citing
consolidated appeals concerning Lipitor and Effexor XR
involve antitrust challenges related to that pharmaceutical
regulatory scheme. This panel previously detailed much of the
factual background and procedural history of these appeals.
See Lipitor III, 855 F.3d at 136- 42. In relevant
part, we repeat and expand on much of that earlier
In re Lipitor Antitrust Litigation, Nos. 14-1402 et
al., plaintiffs are a putative class of direct purchasers of
branded Lipitor, a putative class of end payors, and several
individual retailers asserting direct-purchaser
claims. We will refer to these plaintiffs
collectively as the "Lipitor plaintiffs."
Defendants are Pfizer Inc., Ranbaxy Inc., and their
respective corporate affiliates; they will be referred to
collectively as the "Lipitor defendants."
We proceed by outlining the factual background behind those
consolidated appeals and then describing their procedural
is a brand-name drug designed to reduce the level of LDL
cholesterol in the bloodstream. In 1987, the U.S. Patent and
Trademark Office (PTO) granted Pfizer the original patent for
Lipitor. That patent-designated U.S. Patent No. 4,
681, 893 (the '893 Patent)-claimed protection for
atorvastatin, Lipitor's active ingredient. Although
initially set to expire on May 30, 2006, the '893 patent
received an extension from the FDA, lengthening the
patent's term through March 24, 2010.
obtained additional, follow-on patent protection for Lipitor
in December 1993 when the PTO issued U.S. Patent No. 5, 273,
995 (the '995 Patent). That patent claimed protection for
atorvastatin calcium, the specific salt form of the active
atorvastatin molecule in Lipitor. Lipitor plaintiffs
assert that Pfizer committed fraud in the procurement and
enforcement of the '995 Patent. They allege that Pfizer
submitted false and misleading data to the PTO to support its
claim that the cholesterol-synthesis inhibiting activity of
atorvastatin calcium was surprising and unexpected.
Specifically, Lipitor plaintiffs claim that Pfizer
chemists informed senior management that the '893 Patent
already covered atorvastatin calcium; Pfizer produced a
misleading chart and other data, purportedly cherry-picked,
to support its claim that atorvastatin calcium was several
times more effective than expected; and, in order to avoid
undermining its claim of surprising results, Pfizer
intentionally withheld another dataset that contradicted its
claim as to the surprising effectiveness of atorvastatin
calcium. The PTO originally denied the patent application for
atorvastatin calcium as "anticipated" by the
'893 Patent. In response, Pfizer submitted a declaration
from one of its chemists claiming even greater, i.e., more
surprising, results from testing atorvastatin calcium. The
PTO again rejected the patent application for atorvastatin
calcium based on its contents being covered by the '893
Patent. Pfizer appealed that determination to the PTO's
Patent Trial and Appeal Board (PTAB). The PTAB reversed the
rejection of Pfizer's patent application, concluding that
the application was not anticipated by the '893 Patent.
It, however, required further proceedings on Pfizer's
application, noting that "[a]n obviousness rejection . .
. appear[ed] to be in order." Lipitor JA353 (DPP Orig.
Am. Compl. ¶¶ 157-58). Nevertheless, as noted
above, the PTO concluded that the patent application claimed
nonobvious material and issued the '995 Patent. The
'995 Patent expired on June 28, 2011.
obtaining the '893 and '995 Patents, Pfizer launched
Lipitor in 1997. Following Lipitor's 1997 launch, Pfizer
obtained five additional patents, none of which, according to
Lipitor plaintiffs, could delay further generic
versions of the drug from coming to market. Pfizer listed all
Lipitor patents in the FDA's Orange Book, with the
exception of certain "process" patents, which could
not be listed. Lipitor plaintiffs allege fraud only
as to the procurement and enforcement of the '995 Patent.
August 2002, Ranbaxy obtained ANDA first-filer status for a
generic version of Lipitor. Sometime later in 2002, Ranbaxy
notified Pfizer of its paragraph IV certifications, which
asserted that Ranbaxy's sale, marketing, or use of
generic Lipitor would not infringe any valid Pfizer patent.
Pfizer subsequently sued Ranbaxy for patent infringement in
the District of Delaware within the 45-day period prescribed
by the Hatch-Waxman Act. Pfizer alleged that Ranbaxy's
generic would infringe the '893 and '995 Patents. As
a result of Pfizer's lawsuit, the FDA withheld approval
of Ranbaxy's ANDA for 30 months pursuant to the
bench trial, the Delaware District Court ruled that
Pfizer's patents were valid and enforceable and would be
infringed by Ranbaxy's generic. Pfizer Inc. v.
Ranbaxy Labs. Ltd., 405 F.Supp.2d 495, 525-26 (D. Del.
2005). In doing so, it rejected Ranbaxy's argument that
the '995 Patent was procured by inequitable conduct.
Id. at 520-25. On appeal, the Federal Circuit
affirmed the District Court's ruling that the '893
Patent would be infringed. Pfizer Inc. v. Ranbaxy Labs.
Ltd., 457 F.3d 1284, 1286 (Fed. Cir. 2006). But, the
Federal Circuit reversed in part, holding that claim 6 of the
'995 Patent was invalid. Id. at 1291-92. On
remand, the District Court enjoined FDA approval of
Ranbaxy's ANDA until March 24, 2010, the date of the
'893 Patent's expiration.
2005, as the 30-month statutory window barring Ranbaxy's
generic market entry was closing, Pfizer filed a citizen
petition with the FDA stating that the amorphous
noncrystalline form of atorvastatin used in generic Lipitor
(including in Ranbaxy's, as identified in its ANDA) may
be "inferior in quality" to branded Lipitor's
crystalline form. Lipitor JA1851. Lipitor plaintiffs
claim that this citizen petition was a sham. In particular,
they allege that Pfizer's citizen petition ignored both a
decade-old FDA policy and FDA statements expressing the
immateriality of drug form (i.e., crystalline versus
amorphous), ignored Pfizer's own use of the amorphous
form of branded Lipitor in its clinical studies, and lacked
any evidence to support its claims. In May 2006, the FDA
informed Pfizer that it had not yet reached a decision on the
petition, citing the need for further review and analysis
given the "complex issues" it raised. Lipitor
JA1877. The FDA eventually denied the citizen petition in a
12-page decision issued on November 30, 2011.
2007, following the Federal Circuit's ruling invalidating
claim 6 of the '995 Patent, Pfizer applied for a
reissuance of the '995 Patent to cure the relevant error.
Ranbaxy filed an objection to the reissuance with the PTO. As
explained below, however, Ranbaxy withdrew its objection, and
the PTO reissued the '995 Patent in April 2009, relying
on Lipitor's "commercial success, " without
addressing whether Pfizer first obtained the patent using
allegedly fraudulent submissions.
their Lipitor patent dispute, Pfizer and Ranbaxy also
litigated a patent-infringement suit regarding a separate
drug, Accupril. Pfizer owned the patent on Accupril, enjoying
annual sales of over $500 million. Teva Pharmaceuticals first
filed an ANDA seeking approval to market a generic version of
Accupril. Ranbaxy subsequently filed an ANDA for Accupril as
well. Pfizer sued Teva, resulting in Teva being enjoined from
selling its generic until expiration of Pfizer's Accupril
patent. Meanwhile, Ranbaxy still sought to sell its version
of generic Accupril but could not do so because of the
180-day exclusivity period (not yet triggered) available to
Teva under the Hatch-Waxman Act. With Teva enjoined from
selling its generic Accupril and Ranbaxy prevented from
selling its generic because of Teva's first-filer
exclusivity right, Teva and Ranbaxy entered into an agreement
through which Teva became the exclusive distributor of
Ranbaxy's generic. The parties agreed to split the
profits from the sales, and Ranbaxy agreed to indemnify Teva
for any liability related to the launch of its generic.
Ranbaxy received approval for its generic version of Accupril
after receiving that approval, Ranbaxy launched its generic
Accupril, and Pfizer brought suit almost immediately, seeking
treble damages for willful infringement. Pfizer also sought a
preliminary injunction against Ranbaxy and Teva, informing
the court that Ranbaxy's generic sales
"decimated" its Accupril sales. The District Court
in Pfizer's Accupril action granted the injunction
halting Ranbaxy's generic sales, and the Federal Circuit
affirmed the grant. Pfizer Inc. v. Teva Pharm. USA,
Inc., 429 F.3d 1364, 1383 (Fed. Cir. 2005). Pfizer
posted a $200 million bond in conjunction with the District
Court's entry of the injunction. After entry of the
injunction, Pfizer expressed confidence that it would succeed
in obtaining a substantial monetary judgment from Ranbaxy. On
June 13, 2007, in light of the disputed Accupril patent's
expiration, the District Court vacated the preliminary
injunction. The only issues that remained contested were
Pfizer's claims for past damages and Ranbaxy's
counterclaim as secured by the preliminary injunction bond.
March 2008, Pfizer again sued Ranbaxy in the District of
Delaware over Lipitor; this time, Pfizer claimed that
Ranbaxy's generic Lipitor would infringe Pfizer's two
Lipitor-related process patents. Lipitor plaintiffs
contend that this litigation was a sham because no imminent
threat of harm to Pfizer existed and because Pfizer knew
Ranbaxy's generic would not violate those patents. They
assert that the actual purpose of Pfizer's suit was to
create "the illusion of litigation" so that the
parties could enter a settlement agreement. Lipitor JA254
(DPP Sec. Am. Compl. ¶ 137).
long after Pfizer brought suit against Ranbaxy, on June 17,
2008, Pfizer and Ranbaxy executed a near-global litigation
settlement-which Lipitor plaintiffs allege
constituted an unlawful reverse payment- regarding scores of
patent litigations around the world, including the Lipitor
and Accupril disputes. The settlement ended the Accupril
litigation with prejudice, and brought to a close not only
all domestic patent infringement litigation between Pfizer
and Ranbaxy pertaining to Lipitor, but also all foreign
litigation between the two companies over Lipitor. By the
settlement's terms, Ranbaxy agreed to delay its entry in
the generic Lipitor market until November 30, 2011. In
addition, Pfizer and Ranbaxy negotiated similar market entry
dates for generic Lipitor in several foreign jurisdictions.
Ranbaxy also paid $1 million to Pfizer in connection with the
Accupril litigation, and Pfizer's $200 million injunction
bond from the Accupril litigation was released. Ranbaxy
further agreed to cease its protests on the '995
Patent's reissuance. (As noted above, the PTO
subsequently issued the '995 Patent in March 2009.)
Although not alleged in their complaints, the settlement also
created a Canadian supply arrangement for generic Lipitor
between the parties and resolved other litigation regarding
the pharmaceutical drug Caduet.
delayed generic entry until November 2011, thus extending
Pfizer's exclusivity in the Lipitor market twenty months
beyond the expiration of the '893 Patent and five months
beyond the expiration of what Ranbaxy alleged was the
fraudulently procured '995 Patent. As a result,
Ranbaxy's delayed entry created a bottleneck in the entry
of generic Lipitor from later ANDA filers. Due to its ANDA
first-filer status, Ranbaxy was entitled to the first-filer
180-day generic market exclusivity. Under the settlement
agreement, though, Ranbaxy would not trigger that period by
entering the generic market until November 2011. That meant
that any other would-be generic manufacturer that wanted
Ranbaxy's 180-day period to begin earlier than November
2011 needed a court to hold that all of Pfizer's Lipitor
patents listed in the Orange Book were invalid or not
infringed. Pfizer helped to forestall this possibility,
Lipitor plaintiffs assert, through a combination of
lawsuits against subsequent ANDA filers. The FDA ultimately
approved Ranbaxy's Lipitor ANDA on November 30, 2011, the
day Ranbaxy's license to the unexpired Lipitor patents
with Pfizer commenced.
in late 2011, Lipitor direct purchasers and end
payors filed separate antitrust actions in various federal
district courts. The cases were subsequently referred to the
Judicial Panel on Multidistrict Litigation ("JPML")
for coordination. The JPML transferred each case to the
District of New Jersey, assigning the matters to District
Judge Peter G. Sheridan. See In re Lipitor Antitrust
Litig., 856 F.Supp.2d 1355 (J.P.M.L. 2012).
the direct-purchaser and end-payor plaintiffs filed amended
class action complaints; Lipitor individual-retailer
plaintiffs likewise filed complaints joining the consolidated
proceedings. The complaints raise two substantively identical
claims: (1) a monopolization claim under Section 2 of the
Sherman Act (15 U.S.C. § 2) or a state analogue against
Pfizer, asserting that the company engaged in an overarching
anticompetitive scheme that involved fraudulently procuring
the '995 Patent from the PTO (Walker
Processfraud), falsely listing that patent in the
FDA's Orange Book, enforcing the '995 Patent and
certain process patents through sham litigation, filing a
sham citizen petition with the FDA, and entering into a
reverse payment settlement agreement with Ranbaxy; and (2) a
claim under Section 1 of the Sherman Act (15 U.S.C. § 1)
or a state analogue against both Pfizer and Ranbaxy,
challenging the settlement agreement as an unlawful restraint
defendants filed motions to dismiss all the complaints under
Rule 12(b)(6) of the Federal Rules of Civil Procedure. During
the pendency of those motions, on May 16, 2013, the District
Court stayed proceedings, awaiting the Supreme Court's
decision in Actavis. Following that decision on June
17, 2013, the District Court reopened the case and permitted
the parties to file supplemental briefs on the pending
motions to dismiss.
September 5, 2013, the District Court dismissed
Lipitor plaintiffs' complaints to the extent
they were based on anything other than the reverse payment
settlement agreement. In re Lipitor Antitrust
Litig., 2013 WL 4780496, at *27 (D.N.J. Sept. 5, 2013)
(Lipitor I). The Court specifically rejected the
Walker Process fraud, false Orange Book listing,
sham litigation, sham FDA citizen petition, and overall
monopolistic scheme allegations related to Lipitor
plaintiffs' monopolization claims against Pfizer.
Id. at *15-23. However, the Court granted leave to
file amended complaints focused solely on the reverse payment
settlement agreement between Pfizer and Ranbaxy. Id.
plaintiffs filed amended complaints in October 2013. The
direct purchasers and end payors attached their prior
complaints as exhibits to their new complaints to preserve
the allegations that had been dismissed for appeal.
Similarly, the independent retailers stated in the first
paragraph of their new complaints that they were also
preserving the previously dismissed allegations. In November
2013, Lipitor defendants moved to dismiss the
September 12, 2014, the District Court dismissed the direct
purchaser's amended complaint with prejudice, rejecting
the remaining allegations relating to the reverse payment
settlement agreement between Pfizer and Ranbaxy. In re
Lipitor Antitrust Litig., 46 F.Supp.3d 523 (D.N.J. 2014)
(Lipitor II). The complaints of the end payor and
individual retailers were dismissed that same day in light of
the District Court's dismissal of the direct
October 10, 2014, the direct purchasers filed a motion to
amend the judgment and for leave to file an amended
complaint, contending that the District Court applied "a
new, heightened pleading standard." Lipitor JA151. That
motion was denied on March 16, 2015. These timely appeals
In re Effexor XR Antitrust Litigation, Nos. 15-1184
et al., plaintiffs are a putative class of direct purchasers
of branded Effexor XR, a putative class of end payors, two
individual third-party payors, and several individual
retailers asserting direct-purchaser claims. We will refer to
these parties collectively as the "Effexor
plaintiffs." Defendants are Wyeth, Inc., Teva
Pharmaceutical Industries Ltd., and their respective
corporate affiliates. We will likewise refer to these parties
collectively as the "Effexor defendants."
As with the Lipitor ...