Antitrust Law Daily Wrap Up, TOP STORY—D.N.J.: Pharmacies dismissed from Lipitor suit for implausible reverse payment claims, (Nov 6, 2014)

By Greg Hammond, J.D.

A number of pharmacy plaintiffs were unable to demonstrate that Ranbaxy Laboratories Ltd. and Pfizer, Inc. entered into a reverse payment settlement agreement (RPSA) that blocked generic competition for the pharmaceutical drug atorvastatin calcium sold under the brand name Lipitor. The federal district court in Trenton, New Jersey therefore dismissed the pharmacies’ complaint (In re Lipitor Antitrust Litigation, November 5, 2014, Sheridan, P.).

The pharmacy plaintiffs alleged that Ranbaxy and Pfizer entered into an illegal RPSA in 2008 by signing a settlement agreement in which Pfizer gave substantial financial inducements to Ranbaxy, in exchange for Ranbaxy’s agreement to delay its launch of generic Lipitor until November 30, 2011. The financial inducements included: (1) Pfizer’s “sweetheart” agreement to dismiss damages claims likely worth hundreds of millions of dollars in Accupril litigation, in exchange for a token “pretextual” payment of $1 million; and (2) the right to market generic Lipitor in at least 11 foreign markets outside the United States.

According to the court, the pharmacy plaintiffs failed to calculate the reasonable valuation of the Pfizer/Ranbaxy alleged reverse payment. Rather, the pharmacies merely relied on one or two statements made by Pfizer executives regarding the facts underlying their claims. In previously dismissing direct purchaser plaintiffs’ claims in this case, the court determined that the one or two statements made by Pfizer executives were insufficient to plausibly state their reverse payment claims. Consequently, the pharmacy plaintiffs’ complaint, which attempts to prove a per se market allocation theory under California law, was deemed implausible in light of the court’s previous ruling.

The case number is 3:12-cv-02389 (PGS).

Attorneys: Gil D. Messina (Messina Law Firm) and Joseph M. Alioto (Alioto Law Firm) for RP Healthcare, Inc. Brendan G. Woodard (White & Case LLP) for Pfizer Inc.

Companies: Pfizer Inc.; Ranbaxy; RP Healthcare, Inc.

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