Antitrust Law Daily Wrap Up, ANTITRUST—D. Conn.: Discovery limited to market of Aggrenox, generics in pay-for-delay suit, (Aug 9, 2016)

By Linda O’Brien, J.D., LL.M.

In an action by alleged purchasers of the prescription drug Aggrenox against various pharmaceutical companies for allegedly violating state and federal antitrust laws by entering into a "pay for delay" agreement, the federal district court in Bridgeport, Connecticut, has restricted discovery and evidence in the case to the market for Aggrenox and its generic equivalents. Thus, the defendant drug companies’ motions to expand discovery were denied (In re Aggrenox Antitrust Litigation, August 8, 2016, Underhill, S.).

Aggrenox is a brand-name prescription medication consisting of a particular combination of dipyridamole and aspirin, approved for lowering the risk of stroke or transient ischemic attack. A number of pharmaceutical companies were sued by direct and indirect purchasers of the prescription drug, for allegedly entering into an unlawful agreement, delaying entry of generic Aggrenox, in violation of federal and state antitrust laws. In March 2015, the court entered an order partially granting the pharmaceutical companies’ motion to dismiss, but leaving the federal antitrust claims mostly intact.

The court ordered the parties to show cause why an order restricting discovery and evidence in the case to the market of Aggrenox and its generic equivalent should not be entered. The defendant pharmaceutical companies sought to expand discovery of data relating to various drugs in the broader market of antiplatelet treatments other than Aggrenox and its generic equivalent since the additional information was relevant to the definition of the product market.

Market power. The court held that the relevant market in the case was determined by the challenged agreement and therefore the only relevant market was the market for Aggrenox and its generic equivalents. The current action was filed after the Supreme Court’s decision in FTC v. Actavis, Inc., 133 S. Ct. 223 (2013), which found that large and unjustified reverse payment settlements may violate antitrust laws in patent invalidity litigation. The Actavis Court rejected presumptive rules and left to the lower courts the structuring of the rule-of-reason antitrust litigation, the court explained.

The Actavis decision did not hold that a large reverse payment was dispositive of antitrust liability or that a patent guaranteed market power. Here, the only relevant market was the market in which the challenged agreement allegedly acted as an anticompetitive restraint and would be implicitly defined by the scope of the disputed patent, in the court’s view. The defendants’ argument that brand manufacturers needed to charge higher prices in order to recoup enormous development and marketing costs was rejected. The court noted that in this case there was evidence of actual market data since generics had already entered the market and the effect of new competitors provided a basis to evaluate the question of supra-competitive pricing. Thus, sales and pricing of data about other drugs was redundant because any substitution effect constraining the price of Aggrenox would already be included in this analysis.

In rejecting the defendants’ contention that Aggrenox meaningfully competed in a broad market of antiplatelet drugs, the court noted that Aggrenox was a relatively small participant in that market and that limited competition imposed a limited constraint on prices. While competition in a broader market might limit damages, it did not eliminate the competitive harm and did not provide a defense to liability.

Certification for interlocutory appeal. In exercising its discretion to certify the interlocutory appeal of its order, the court noted that if its ruling was reversed after final judgment, the litigation would effectively start anew and require extensive discovery. As 28 U.S.C. §1292(b) requires, the order involved a controlling question of law as to which there was substantial ground for a difference of opinion and that an immediate appeal may materially advance the ultimate termination of the litigation, the court concluded.

The case is No. 3:14-md-02516-SRU.

Attorneys: Mathew P. Jasinski (Motley Rice LLC) for A.F. of L A.G.C. Building Trades Welfare Plan and Painters District Council No. 30 Health & Welfare Fund. Anne Mathilde Schmidt (Odom & Des Roches, LLC) and Brian D. Brooks (Smith Segura & Raphael, LLP) for Miami-Luken, Inc. Brigid M. Carpenter (Baker, Donelson, Berman, Caldwell & Berkowitz, PC) for Barr Pharmaceuticals Inc. Jaime M. Crowe (White & Case LLP) for Boehringer Ingelheim International GmbH and Boehringer Ingelheim Pharmaceuticals Inc.

Companies: A.F. of L A.G.C. Building Trades Welfare Plan; Painters District Council No. 30 Health & Welfare Fund; Miami-Luken, Inc.; Barr Pharmaceuticals Inc.; Boehringer Ingelheim International GmbH; Boehringer Ingelheim Pharmaceuticals Inc.

Cases: Antitrust ConnecticutNews