Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Drug wholesalers and retailers settle Prograf class action for $98M, (Jan 26, 2015)

By Linda O’Brien, J.D., LL.M.

In multidistrict litigation against Japanese pharmaceutical manufacturer Astellas Pharma US, Inc. for foreclosing generic competition to its branded prescription immunosuppressant Prograf, Burlington Drug Company Inc., King Drug Company of Florence, Inc., Louisiana Wholesale Drug Co., Stephen L. LaFrance Holdings, Inc., Uniondale Chemists, Inc. and other direct purchaser plaintiffs have agreed to settle the action for a total of $98 million, according to a motion for preliminary approval of the settlement filed in the federal district court of Boston (In re Prograf Antitrust Litigation, January 22, 2015).

Prograf is a branded prescription immunosuppressant used in organ transplant patients manufactured by Astellas. Direct purchaser plaintiffs—including pharmaceutical wholesalers Burlington Drug Company Inc., King Drug Company of Florence, Inc., Louisiana Wholesale Drug Co., Stephen L. LaFrance Holdings, Inc., and Uniondale Chemists, Inc.—sued Astellas, alleging that they overpaid for the drug because Astellas foreclosed generic competition to its branded drug by delaying generic drug market entry. Specifically, they contended that, after another pharmaceutical company sought Food and Drug Administration (FDA) approval to market and sell generic versions of Prograf, Astellas filed an objectively baseless citizen petition with the agency for the purpose of delaying such approval.

The plaintiffs are seeking preliminary approval of a proposed settlement under which defendant Astellas will pay $98 million to be distributed among the class in exchange for full and complete release of all claims the plaintiffs have asserted.

According to the memorandum in support of the plaintiffs’ motion, the proposed settlement meets the standards for preliminary approval. The settlement was reached after good faith, intensive arm’s-length negotiations; fact and expert discovery; substantial briefing on the issues; and consultation with economic, scientific, and regulatory experts.

Class counsel represented that it is highly experienced in antitrust litigation and believes that the settlement is fair and in the best interests of the class. Finally, the class, which is composed of sophisticated businesses that have participated in prior class actions relating to allegations of delayed generic competition, is fully supportive of the settlement

Attorneys: Bruce E. Gerstein and Dan Litvin (Garwin Gerstein & Fisher LLP) and Thomas M. Sobol, David S. Nalven, Kristen A. Johnson, and Jessica MacAuley (Hagens Berman Sobol Shapiro LLP) for direct purchaser plaintiffs.

Companies: Astellas Pharma US, Inc.; Burlington Drug Company Inc.; King Drug Company of Florence, Inc.; Louisiana Wholesale Drug Co.; Stephen L. LaFrance Holdings, Inc.; Uniondale Chemists, Inc.

News: Antitrust MassachusettsNews