Antitrust Law Daily Wrap Up, ANTITRUST—D.N.J.: Pfizer must produce litigation and settlement documents in Lipitor litigation, (Aug 22, 2013)

By Tobias J. Gillett, J.D., LL.M.

In multidistrict class action litigation alleging that Pfizer and other defendants conspired to prolong Pfizer’s monopoly power over the market for its cholesterol drug Lipitor and its generic equivalents, the federal district court in Trenton, New Jersey, compelled production of certain documents related to Pfizer’s litigation against generic manufacturer Ranbaxy, Ranbaxy’s agreement with another generic manufacturer for a back-up manufacturing site, and settlement agreements between Pfizer and six generic manufacturers. However, the court denied a motion to compel production of documents related to foreign patent litigation (In Re: Lipitor Antitrust Litigation, August 20, 2013, Arpert, D.). The court also denied a motion to intervene by non-parties Mylan Pharmaceuticals, Inc. and Mylan Inc.

Motion to intervene. The court denied Mylan’s motion to intervene to seek a protective order restraining production of settlement agreements between Mylan and Pfizer because its interests were adequately protected by Pfizer. In evaluating Mylan’s request for intervention as of right, the court explained that where a potential intervener’s interest “is identical to that of one of the present parties . . . then a compelling showing should be required to demonstrate why this representation is not adequate.”

Here, in resisting the production of the settlement agreements Mylan contended that (1) the agreements were “outside the scope of the limited Discovery Order”; (2) the agreements were “irrelevant to Plaintiffs’ claims”; (3) the agreements were “confidential”; and (4) the plaintiffs had “no need for these agreements.” Pfizer “share[d] the same interests as Mylan in resisting production,” and had “advanced substantially identically arguments as Mylan,” according to the court. Therefore, the court found Mylan could not intervene as of right. Since “Mylan’s interests and arguments [were] closely aligned with and mirror those of Pfizer,” the court found “it would be superfluous to allow Mylan to intervene,” and also denied Mylan’s request for permissive intervention.

Scope of discovery. In addressing the plaintiffs’ motions to compel, the magistrate judge initially reviewed the scope of the district court judge’s limited discovery order. The court found that categories of documents referred to in the order were intended to be “illustrative,” and not “to inflexibly limit the scope of discovery,” rejecting the defendants’ contention that discovery should be limited only “to those categories of discovery which are specifically enumerated.” The court concluded that the “order establishes workable parameters to guide the Parties’ initial discovery efforts.”

Direct purchaser plaintiffs’ motion. The court granted in part and denied in part the direct purchasers’ motion to compel. The court denied the motion as to documents related to litigation in Canada and Australia over Pfizer’s patents in those countries. The direct purchasers claimed information regarding Pfizer’s abuses before the U.S. Patent and Trademark Office (PTO) concerning its patent came to light during those litigations, and sought to determine whether the PTO and the district court in which litigation between Pfizer and generic manufacturer Ranbaxy occurred had access to the facts developed in the foreign proceedings. The court denied the direct purchasers’ request without prejudice because the defendants made a threshold showing that their relevance might be obviated by the court’s ruling on the plaintiffs’ fraud claims, and because production of the documents appeared “to require a significant undertaking.”

However, the court granted the direct purchasers’ request as to documents related to Pfizer’s litigation against Ranbaxy over Ranbaxy’s release of a generic version of Pfizer’s Accupril product. The direct purchasers alleged that Ranbaxy had agreed to delay marketing a generic version of Lipitor in exchange for Pfizer forgiving Ranbaxy’s liability related to Accupril. The court rejected the defendants’ argument that the need for information could be obviated if the court chose to apply a “scope of the patent” test, noting that the Supreme Court had held in FTC v. Actavis, Inc., 133 S. CT. 2223, 2013-1 Trade Cases ¶78,419, “that antitrust principles and patent principles are not mutually exclusive.” Since the Accupril documents could “shed light on the nature of the alleged reverse payment agreement between Pfizer and Ranbaxy,” the documents were relevant, according to the court.

The court also granted the direct purchasers’ motion as to an agreement between Ranbaxy and fellow generic manufacturer Teva to ensure it had a back-up manufacturing site for its generic product. The plaintiffs alleged that the agreement was evidence that “Ranbaxy would have been motivated to launch its generic product at the earliest possible moment,” in the absence of its settlement agreement with Pfizer. The court rejected the defendants’ argument that the agreement was irrelevant because it was not executed until several years after the settlement, noting that “the Supreme Court recently rejected such a hardline approach to evaluation of allegedly anticompetitive agreements” in Actavis. Even if the agreement did have to be evaluated at the time of its execution, the court found it would still be relevant to issues such as “Ranbaxy’s state of mind regarding what it stood to lose by delaying its generic entry,” and producing it would pose “no demonstrable burden” for the defendants.

End-payor plaintiffs’ motion. The court also granted the end-payor plaintiffs’ motion to compel production of settlement agreements related to six domestic litigations involving Pfizer and certain generic companies. The court observed that the defendants’ contention that the requests constituted an “impermissible fishing expedition” was “undermined by the fact that Pfizer has already agreed to produce documents from the underlying litigations which preceded each of the requested settlement agreements.” Moreover, the court noted that “courts have considered settlement agreements when there are allegations of sham litigation.” Finally, the court found that Pfizer concerns regarding confidentiality could “be adequately addressed by the Discovery Confidentiality Order and Protective Order which are already in place.”

The case is Civil Action No. 12-2389 (PGS).

Attorneys: Liza M. Walsh (Connell Foley, LLP) for Pfizer Inc. Allyn Zissel Lite (Lite Depalma Greenberg, LLC) for Ranbaxy. Kimberly Marion Hennings (Garwin Gerstein & Fisher LLP) for Burlington Drug Co., Inc.

Companies: Mylan Inc.; Pfizer Inc.; Ranbaxy; Burlington Drug Co., Inc.

Cases: Antitrust NewJerseyNews