Antitrust Law Daily Wrap Up, ANTITRUST—D. R.I.: Final judgment entered in contraceptive purchasers’ action over patent settlement, (Feb 19, 2015)

By Linda O’Brien, J.D., LL.M.

In a consolidated class action by direct purchasers and end-payors of the oral contraceptive Loestrin 24 FE against three pharmaceutical manufacturers for allegedly conspiring to delay generic competition through the use of reverse-payment agreements, the federal district court in Providence, Rhode Island has entered a final judgment in favor of the defendant drug manufacturers (In re Loestrin 24 FE Antitrust Litigation, February 17, 2015, Smith, W.).

Pharmaceutical company Warner Chilcott manufactures oral contraceptives under the brand name Loestrin 24 FE. Warner holds one patent, U.S. Patent No. 5,552,394 (the '394 patent), with claims that cover Loestrin 24. When Watson Pharmaceuticals, Inc. and Lupin Ltd. submitted applications to the U.S. Food and Drug Administration (FDA) for approval to sell generic versions of Loestrin 24, Warner filed suit, asserting infringement of the '394 patent. Warner subsequently entered into settlement agreements with the generic drug manufacturers to induce them to withdraw their patent challenges.

Two groups of plaintiffs—drug and grocery retailers that operate stores that dispense prescription drugs to the public and employee welfare benefit programs that reimbursed subscribers who purchased Loestrin 24—filed class actions against the three pharmaceutical companies, alleging violations of Section 1 of the Sherman Act and state antitrust laws. In September 2014, the defendants’ motion to dismiss was granted. Before the court was the direct purchasers’ motion for entry of final judgment, end-payors’ motion for reconsideration, and defendants’ motion to stay the drug retailer plaintiffs’ action.

Final judgment. In granting the direct purchasers’ motion for entry of final judgment in favor of the defendants, the court determined that the plaintiffs’ case was immediately appealable since the dismissal of their complaint in its entirety denied them all relief.

Stay of proceedings. The defendants’ motion to stay the drug retailer plaintiffs’ action was granted. Because resolution of the appeals will be determinative of a large portion of those plaintiffs’ claims, judicial economy favored staying the action. Furthermore, the drug retailers failed to persuasively demonstrate that they would be prejudiced by a stay, the court found.

Reconsideration. However, in their motion for reconsideration, the end-payors showed only that they disputed the court’s analysis in dismissing their claims. According to the court, they set forth no evidence that could constitute a “manifest error of law” and their description of the court’s alleged misunderstanding of their arguments was merely a reiteration of their dispute with the court’s analysis. Thus, their motion for reconsideration was denied.

Finally, the court entered final judgment as to the end-payors’ claims. There was no “just reason” to delay entry of final judgment of their claims so the end-payors could appeal the dismissal of their claims at the same time of the direct purchasers.

The case is No. 1:13-md-2472-S-PAS.

Attorneys: Donald A. Migliori (Motley Rice LLC), and Jeffrey M. Padwa, City Solicitor's Office, for City of Providence. Jeffrey B. Pine (Jeffrey B. Pine, PC), Joseph H. Meltzer (Kessler Topaz Meltzer & Check, LLP), and Maria F. Deaton (Lynch & Pine, LLC) for American Sales Company, LLC. Elizabeth G. Arthur (Hilliard & Shadowen, LLC) for United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund. Christopher Lometti (Cohen Milstein Sellers & Toll PLLC) for New York Hotel Trades Council & Hotel Association of New York City, Inc. Adam G. Kurtz (Pomerantz LLP) for Fraternal Order of Police, Fort Lauderdale Lodge 31. John A. Tarantino (Adler Pollock & Sheehan PC) for Warner Chilcott Public Limited Co., and Warner Chilcott Company, LLC. Alison Hanstead (White & Case LLP) for Actavis, Inc. Leiv Blad (Morgan, Lewis & Bockius LLP), and William R. Landry (Blish & Cavanagh, LLP) for Lupin Ltd. and Lupin Pharmaceuticals, Inc.

Companies: American Sales Company, LLC; Warner Chilcott Public Limited Co.; Warner Chilcott Company, LLC; Actavis, Inc.; Lupin Ltd.; Lupin Pharmaceuticals, Inc.

Cases: Antitrust RhodeIslandNews