Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Pa.: Indirect generic purchasers reach $5.3 million settlement with Apotex, (Jun 2, 2025)

By Seth Abrams, J.D., M.A.

Apotex agreed to cooperate with indirect purchaser class plaintiffs to facilitate further settlements or aid in the litigation against non-settling defendants.

The federal district court in Philadelphia, Pennsylvania gave final approval to settlements between indirect purchaser class plaintiffs (“IRPs”) and Apotex Corp. in multidistrict litigation concerning generic pharmaceutical pricing. The amount of settlement was for almost $5.3 million, after opt-out reduction. This amount is before $15,000 in service fees, over $1.7 million in attorney fees, and remaining costs, which are not expected to exceed $500,000. The settlement class includes all dispensers of drugs in the U.S. that “purchased one or more Drugs at Issue from January 1, 2010, through March 5, 2024” directly from distributor AmerisourceBergen Drug Corporation, Cardinal Health, Inc., Red Oak Sourcing, LLC, Morris & Dickson Co., LLC or Walgreens Boot Alliance, Inc or their subsidiaries.” It also included those purchased indirectly from any defendant in the MDL. It excludes defendants and their officers, directors, management, employees, subsidiaries, and affiliates. Additionally, it excludes entities owned in part by judges or justices involved in this action and “all pharmacies owned or operated by publicly traded companies” (In Re: Generic Pharmaceuticals Pricing Antitrust Litigation, No. 2:16-md-02724-CMR (E.D. Pa. May. 30, 2025)).

Background. IRPs Reliable Pharmacy, Halliday’s & Kovisto’s Pharmacy, Russell’s Mr. Discount Drugs, Falconer Pharmacy, Chet Johnson Drug, and North Sunflower Medical Center sought final approval of settlements with Apotex. The court held a hearing on March 17, 2025, pursuant to Rule 23(e) to determine if the proposed class action settlement was “fair, reasonable, and adequate.”

Rule 23(a). To certify a class, the court must find numerosity, commonality, typicality, and adequacy of representation. Numerosity was easily satisfied as the settlement class has more than 59,000 members. Commonality and typicality were met because all class members purchased “generic pharmaceuticals that were priced higher than they should have been because of an alleged conspiracy among manufacturers [including Apotex.]” The named plaintiffs also have interests that align with the class and the service award is in a reasonable amount. In addition, the court noted that class counsel is qualified, experienced, and fully capable of litigating the class member’s claims. Apotex has also “agreed to provide cooperation to IRPs, which will facilitate the administration of the settlements and will aid the litigation against non-settling defendants.”

Rule 23(b). The court found that the alleged collusive conduct by Apotex affected all class members the same way regarding the cost of generic pharmaceuticals. It found that plaintiffs have shown for the purposes of settlement that “a class action is a fair and efficient way to resolve the dispute... against those of alternative available methods of adjudication.” The court noted that “[g]iven the complexity of the litigation, thousands of individual actions would not be a more desirable way of proceeding.” It thus concluded that a class action is superior, at least in the context of settlement, to other methods of adjudication. The court certified the settlement class for the purposes of the final settlement. The court also found that notice of the settlement that was made complies with the court orders regarding notice and that it satisfied the requirements of Rule 23.

Rule 23(e). The court found that the proposed settlement was “fair, reasonable, and adequate.” The court also found that the four factors of fairness were met. Settlement negotiations occurred at arm’s length and there was sufficient discovery. In addition, the proponents of the settlement are experienced in similar litigation and no members of the class have objected to the settlement. The court also found that the relief provided to the class was adequate. It also found that the proposal treats the class members equitably relative to one another by allocating funds on a pro rata basis. The court also noted that the Girsh factors, particularly the complexity of the case and that it would take several years before any claims were resolved, also favored approval of the settlement.

The Case is No. 2:16-md-02724-CMR.

Judge: Rufe, C.

Attorneys: Jason H. Kim (Schneider Wallace Cottrell Konecky Wotkyns LLP) for Health Care Service Corp. James Caleigh MacDonald (Schneider Wallace Cottrell Konecky LLP) for Molina Healthcare, Inc. Regina Marie Calcaterra (Calcaterra Pollack LLP) for County of Suffolk. Abram J. Ellis (Simpson Thacher & Bartlett LLP) for McKesson Medical-Surgical Inc. Larry Krantz (Krantz & Berman LLP) for James N. Brown, Jr. Carl L. Malm (Cleary Gottlieb Steen & Hamilton LLP) for Walgreens Boots Alliance, Inc.

Companies: Health Care Service Corp.; Molina Healthcare, Inc.; McKesson Medical-Surgical Inc.; Walgreens Boots Alliance, Inc.

Cases: Antitrust PennsylvaniaNews