Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Mich.: Diabetes drug patent holders settle monopolization claims for $19M, (Jan 22, 2015)

By Greg Hammond, J.D.

The patent holders for Prandin—a prescription drug used to treat Type 2 Diabetes—obtained final approval of a $19 million settlement, disposing of claims that the patent holders engaged in unlawful acts of monopolization, in violation of the Sherman Act. In granting final approval, the federal district court in Detroit determined that the settlement, which included $6.333 million in attorney fees, was fair, reasonable, and adequate (In re Prandin Direct Purchaser Antitrust Litigation, January 20, 2015, Cohn, A.).

Background. Novo Nordisk A/S and Novo Nordisk, Inc. (collectively, “Novo”) are the patent holders for the prescription drug Prandin. Direct purchasers of the prescription drug filed suit against Novo, alleging that the companies unlawfully blocked FDA approval and market entry of Prandin’s generic bioequivalent, repaglinide. Specifically, it was alleged that Novo switched the “use code” narrative for its Prandin patent by expanding the description of the claim. Further, instead of immediately delisting the new use code narrative, pursuant to a mandatory injunction, Novo appealed the injunction all the way to the Supreme Court. The parties previously reached a $19 million settlement, and Novo Nordisk moved for final approval.

Class definition and notice. The court previously certified the following class for settlement purposes: All persons and entities in the United States and its Territories who purchased Prandin directly from Defendants from May 6, 2009 until June 30, 2014. Notice was provided to all class members in full compliance with Federal Rule of Civil Procedure 23 and due process requirements, the court concluded. It also noted that no class member has objected or requested exclusion from the class.

Final approval. The court approved the final settlement finding that it was fair, reasonable, and adequate because: (1) weighing the risk and uncertainty of litigation against the settlement benefits tilts the scale toward approval; (2) the settlement ensures that class members will receive recoveries without further delay and without incurring additional expense, as opposed to continued litigation that could continue for years at significant additional costs; (3) class counsel has extensive experience, and its judgment that the settlement is in the best interest of the Class is entitled to significant weight; (4) the plaintiffs undertook a substantial investigation of the case, which fully informed their decision to enter into the settlement; (5) no class member has objected to or opted out of the settlement; (6) the settlement negotiations were conducted in good faith; and (7) the public interest is served by settling the case and providing prompt compensation to those directly injured by Novo’s alleged actions.

Attorney fees, incentive awards. Class counsel was also granted its request for attorney fees in the amount of $6.333 million and reimbursement of $147,975.82 in expenses. The court determined that the attorney fees, representing one-third of the settlement fund, was fair, reasonable, fully justified, and within the range of fee awards in settlements of this type. It also awarded class representatives American Sale Company, LLC and Rochester Drug Co-Operative, Inc. $50,000 each in incentive awards, finding that the two companies diligently and completely fulfilled their obligations to the class.

The case number is 2:10-cv-12141-AC-DAS.

Attorneys: David S. Nalven (Hagens Berman Sobol Shapiro LLP) and J. Douglas Richards (Cohen Milstein Sellers & Toll PLLC) for American Sales Company, Inc. Andrew C. Curley (Berger & Montague, PC) for Rochester Drug Co-Operative, Inc. Ashley E. Johnson (Gibson Dunn & Crutcher LLP) for Novo Nordisk A/S and Novo Nordisk, Inc.

Companies: American Sales Company, LLC; Rochester Drug Co-Operative, Inc.; Novo Nordisk A/S; Novo Nordisk, Inc.

Cases: Antitrust MichiganNews