Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Dr. Reddy’s settles action over Nexium drug maker’s alleged pay-for-delay agreements, (Oct 21, 2014)

By Linda O’Brien, J.D., LL.M.

Dr. Reddy’s Laboratories has agreed to cooperate with purchasers of the brand name drug Nexium in their suit against its manufacturer, AstraZeneca, and two other generic drug manufacturers for allegedly entering into reverse payment agreements in order to block generic competition for Nexium, according to the direct purchaser and end payor plaintiffs’ motions for preliminary approval of the settlement filed in the federal district court in Boston (In re Nexium (Esomeprazole) Services Antitrust Litigation, Case No. 1:12-md-02409.).

Wholesale drug distributors (Direct Purchasers), health and welfare funds (End Payors), and several retailers filed a series of class action suits against AstraZeneca and the three generic drug manufacturers—Ranbaxy, Teva, and Dr. Reddy’s—for alleged entering into reverse payment agreements to delay generic competition for Nexium. Shortly before the trial was to commence, the plaintiffs and Dr. Reddy’s reached a settlement, and the plaintiffs moved for preliminary approval of the settlement agreement.

Pursuant to the terms of the settlement, in exchange for Dr. Reddy’s cooperation at trial against the remaining defendants—AstraZeneca, Raxbaxy, and Teva , Dr. Reddy’s will be released from all claims by the plaintiffs in the class action. The remaining defendants are jointly and severally liable to the plaintiffs for the damages arising from the defendants’ overarching conspiracy to delay the introduction of generic versions of Nexium and the settlement will enhance the chances and size of the recovery from the remaining defendants, according to the plaintiffs. Under the proposed settlement, Dr. Reddy’s will provide various forms of cooperation at trial, motions stated.

Preliminary approval of the settlement should be granted, the plaintiffs argued, because the settlement falls within the range of possible approval as fair, adequate, and reasonable. In their motions, the plaintiffs said that the proposed settlement was the product of good faith, extensive, arms-length negotiations and there was sufficient discovery for class counsel to make an informed decision. Finally, counsel for the class is highly experienced in antitrust litigation and strongly believes that the settlement—Dr. Reddy’s valuable cooperation–is in the best interests of the class as it will advance the plaintiffs’ interests at trial.

Attorneys: Joseph Opper (Garwin Gerstein & Fisher LLP), Thomas M. Sobol (Hagens Berman Sobol Shapiro LLP), and David F. Sorensen (Berger & Montague, P.C.) for the direct purchaser plaintiffs. Glen DeValerio (Berman DeValerio), Steve D. Shadowen and Anne Fornecker (Hilliard & Shadowen LLC), Jayne A. Goldstein (Pomerantz LLP), Kenneth A. Wexler (Wexler Wallace LLP), and J. Douglas Richards (Cohen Milstein Sellers & Toll, PLLC) for the end payor plaintiffs. Ajay Kayal (Budd Larner PC) and Alan H. Pollack (Hopgood, Calimafde, Kalil, Blaustein & Judlowe) for Dr. Reddy's Laboratories Ltd. and Dr. Reddy's Laboratories, Inc.

Companies: Dr. Reddy’s Laboratories Ltd.; Dr. Reddy’s Laboratories, Inc.

News: Antitrust MassachusettsNews