Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Class action alleges anticompetitive scheme by maker of acne drug Solodyn and generic manufacturers, (Jul 25, 2013)

By Peter Reap, J.D., LL.M.

Rochester Drug Co-Operative, Inc. (“RDC”), on behalf of itself and all others similarly situated, has asserted a class action against Medicis Pharmaceutical Corp., maker of minocycline hydrochloride extended release tablets, the prescription drug for the treatment of acne marketed under the brand name Solodyn, and a number of generic drug manufacturers under the antitrust laws. RDC alleges that Medicis orchestrated a multi-faceted scheme, undertaken alone and with, between, and among the generic manufacturers, to improperly restrain trade, and maintain, extend, and abuse Medicis’s monopoly power in the market for minocycline hydrochloride extended release tablets. As a result, RDC and the class of direct purchasers it seeks to represent were forced to pay overcharges.

Named as defendants in the suit along with Medicis are Valeant Pharmaceuticals International, Inc., Teva Pharmaceutical Industries, Ltd., Teva Pharmaceuticals USA, Inc., Barr Laboratories, Inc., Impax Laboratories, Inc. (“Impax”), Mylan Laboratories, Inc., Matrix Laboratories Ltd., Lupin Limited, Lupin Pharmaceuticals Inc., Ranbaxy Pharmaceuticals, Inc., Ranbaxy Inc., Ranbaxy Laboratories, Ltd., and Sandoz Inc.

According to the complaint, recognizing the dire threat that generic competition posed to its Solodyn sales in the near-term, Medicis formulated a multi-step plan to protect Solodyn from generic competition using any means necessary, whether lawful or unlawful. First, Medicis filed an objectively and subjectively baseless sham petition with the FDA solely to delay FDA approval of Impax’s generic Solodyn ANDA. Next, Medicis and Impax entered into an unlawful Exclusion Payment Agreement. Under this unlawful Agreement, Medicis paid Impax at least $55 million to drop the patent challenge and stay out of the market for three years, until November 2011.

Third, the complaint states, Medicis improperly submitted the ’838 Patent to the FDA for listing in the Orange Book, and then initiated and maintained sham patent suits against multiple potential generic competitors solely in an attempt to automatically stay FDA approval of those generic manufacturers’ ANDAs for up to 30 months. Fourth, Medicis filed yet another objectively and subjectively baseless sham petition to delay FDA approval of any additional generic Solodyn ANDAs. Fifth, to prevent any generic version of 45mg, 90mg or 135mg strength Solodyn from coming to the market before Impax entered in November 2011, Medicis orchestrated additional Exclusion Payment Agreements with other generic drug makers. Sixth, to delay generic competition beyond November 2011 Medicis implemented an anticompetitive switch strategy, known in the industry as “product hopping.”

The complaint asserts claims of: monopolization, attempted monopolization, and conspiracy to monopolize under the Sherman Act; and conspiracy and combination in restraint of trade, also under the Sherman Act. The complaint requests a declaration of unlawfulness, treble damages, and attorney fees and costs.

The complaint in Rochester Drug Co-Operative, Inc. v. Medicis Pharmaceutical Corp., Case No. 2:13-cv-04270-JCJ, was filed July 23, 2013.

Attorneys: David F. Sorensen (Berger & Montague) for Rochester Drug Co-Operative, Inc.

Companies: Rochester Drug Co-Operative, Inc.; Medicis Pharmaceutical Corp.; Valeant Pharmaceuticals International, Inc.; Teva Pharmaceutical Industries, Ltd.; Teva Pharmaceuticals USA, Inc.; Barr Laboratories, Inc.; Impax Laboratories, Inc.; Mylan Laboratories, Inc.; Matrix Laboratories Ltd.; Lupin Limited; Lupin Pharmaceuticals Inc.; Ranbaxy Pharmaceuticals, Inc.; Ranbaxy Inc.; Ranbaxy Laboratories, Ltd.; Sandoz Inc.

News: Antitrust PennsylvaniaNews