Antitrust Law Daily Wrap Up, TOP STORY—D.N.J.: Monopolization, price fixing claims properly rejected in lamotrigine suit, (May 19, 2016)

By Greg Hammond, J.D.

The federal district court in Newark was not convinced that it had made a manifest error of law in dismissing antitrust claims brought under California and New York law, in a pay-for-delay suit concerning the prescription drug lamotrigine. The court declined a request to reconsider its dismissal of the state law monopolization and price fixing claims, finding that the claims were time-barred, the supposed indirect purchasers of the prescription drug failed to meet their obligation of due diligence under the New York Donnelly Act, and California’s delayed discovery rule did not postpone the accrual date of the Cartwright Act and Unfair Competition Law claims (In re Lamictal Indirect Purchaser and Antitrust Consumer Litigation, May 18, 2016, Walls, W.).

Two health and welfare funds and a health plan participant filed a complaint on behalf of alleged indirect purchasers of lamotrigine—a prescription medication used to treat epilepsy and bipolar disorder—challenging a patent litigation settlement between pharmaceutical companies SmithKline Beecham Corporation, doing business as GlaxoSmithKline (GSK), and Teva Pharmaceuticals. The court previously dismissed as time-barred the plaintiffs’ claims that GSK and Teva violated New York’s Donnelly Act and California’s Cartwright Act and Unfair Competition law (UCL) by entering into a No-AG Commitment, under which GSK agreed not to market its own authorized generic lamotrigine tablet during Teva’s 180-day exclusivity period. The plaintiffs have moved for reconsideration.

Donnelly Act claim. The court denied the motion to reconsider its dismissal of the Donnelly Act monopolization claim, finding that the record before the court on the motion to dismiss was sufficient to determine that the plaintiffs did not meet their obligation of due diligence. The claim, according to the court, accrued on August 30, 2006, when the plaintiffs first began to suffer the effects of the allegedly anticompetitive agreement, not on October 6, 2008, when the terms of the allegedly unlawful No-AG Commitment were expressly disclosed. The court further noted that the plaintiffs waited nearly four years after learning of the No-AG Commitment to bring their claim in 2012. In addition, the plaintiffs’ purported justification for the delay—the FTC’s publication of a report identifying no-AG agreements as potentially unlawful in 2011—was expressly rejected as irrelevant. Since the plaintiffs merely repeated their position and raised no additional arguments, the plaintiffs failed to meet their burden to facially demonstrate that they filed their complaint within a reasonable amount of time after learning of the No-AG Commitment, the court concluded.

Cartwright Act, UCL claims. The plaintiffs also asserted that California’s delayed discovery rule postponed the accrual of their Cartwright Act and UCL claims because they did not know the complete terms of the allegedly anticompetitive settlement agreement, including the No-AG Commitment, until 2008. The court rejected this argument, however, noting that enough information was publicly available by August 30, 2006, to give plaintiffs a reason to discover their causes of action on the date that they allegedly began to suffer harm. The California claims were therefore properly dismissed as time-barred, and the motion for reconsideration was denied.

The case is No. 12-5120 (WHW)(CLW).

Attorneys: Michael John Debenedictis (Debenedictis & Debenedictis LLC) for Carolyn Mcananey. Douglas Scott Eakeley (Lowenstein Sandler PC) for SmithKline Beecham Corp. Mayra Velez Tarantino (Patunas Tarantino LLC) for Teva Pharmaceutical Industries Ltd. and Teva Pharmaceuticals USA, Inc.

Companies: SmithKline Beecham Corp.; Teva Pharmaceutical Industries Ltd.; Teva Pharmaceuticals USA, Inc.

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