In Re Buspirone Patent Litigation

185 F. Supp. 2d 363, 2002 U.S. Dist. LEXIS 2626, 2002 WL 243184
District Court, S.D. New York·Decided February 14, 2002·No. MDL Docket 1410·Published·Cited by 57 cases

Opinion

Opinion and Order No. 19

KOELTL, District Judge.

(Motion to Dismiss Antitrust and Related State Law Claims)

On August 15, 2001, the Judicial Panel on Multidistrict Litigation consolidated for pre-trial purposes before this Court four patent disputes, which had been consolidated under MDL-1410, and twenty-two antitrust actions, which had been consolidated under MDL-1413, all of which involve disputes among the various parties over the propriety of the manufacture, use, sale or allegedly anticompetitive conduct related to the use and sale of buspirone, 1 a drug used to treat anxiety. The Panel has also transferred twelve tag-along cases to this Court.

The defendant in the antitrust actions is Bristol-Myers Squibb Company (“Bristol-Myers” or “BMS”), a company that obtained a patent covering the use of buspi-rone for the treatment of anxiety in 1980 (the “'763 Patent”) and that has been selling the product since 1986, when the Food and Drug Administration (the “FDA”) approved the drug for human use. The plaintiffs are, variously, generic drug makers who seek or have sought to enter the buspirone market, direct purchasers of buspirone products, end-payors who have purchased buspirone, consumer protection organizations, or their representatives, and *366 thirty States. These plaintiffs (the “antitrust plaintiffs”) have consolidated their claims into six Amended Complaints or Pleadings (the “Complaints”).

The Complaints assert a number of claims, all of which arise out of two separate sets of circumstances. First, some of the plaintiffs allege that Bristol-Myers attempted to extend and/or extended an unlawful monopoly over buspirone products for use in the treatment of anxiety, and also entered into a conspiracy to restrain trade in this market, thereby violating Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 & 2, by settling a patent infringement suit with Danbury Pharmacal, Inc. and its affiliate Schein Pharmaceuticals, Inc. (“Schein”) in 1994. In that litigation, Bristol-Myers had argued that Schein would infringe the '763 Patent by manufacturing and selling generic buspi-rone tablets before the '763 Patent expired. The plaintiffs who raise these claims allege that Bristol-Myers’s settlement was a sham used to cover up an unlawful anticompetitive arrangement under which Schein agreed to stay out of the buspirone market and help maintain a public perception that the '763 Patent was valid in return for $72.5 million, even though both parties knew that the '763 Patent was not valid (the “Schein Settlement activities”). 2

Second, all of the Complaints allege that Bristol-Myers attempted to extend and/or extended an unlawful monopoly over the market in buspirone tablets in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2, by abusing a number of provisions of the Hatch-Waxman Amendments, also known as the Drug Price Competition and Patent Term Restoration Act, Pub.L. No. 98-417, 98 Stat. 1585 (1984) (codified as amended at 21 U.S.C. § 355 and 35 U.S.C. § 271(e)), which amended the Federal Food, Drug, and Cosmetic Act (“FDCA”), Pub.L. No. 52-675, 52 Stat. 1040 (1938) (codified as amended at 21 U.S.C. §§ 301-397). The antitrust plaintiffs argue that Bristol-Myers thereby prevented the FDA from approving generic buspirone products that competitors sought to market after the '763 Patent expired. The Complaints allege, in particular, that Bristol-Myers (i) listed a newly-obtained patent (the “'365 Patent”) in an FDA publication entitled the “Approved Drug Products with Therapeutic Equivalence Evaluations,” or the “Orange Book,” on November 21, 2000, less than one day before the '763 Patent expired; (ii) fraudulently represented to the FDA in these listing submissions that the new '365 Patent covered uses of buspirone and that a reasonable claim of patent infringement could be asserted against generic producers of the drug, when Bristol-Myers knew these uses of buspirone clearly would be in the public domain after the '763 Patent expired; and then (iii) immediately brought patent infringement suits against generic competitors who were seeking to enter the buspirone market, thereby triggering an automatic stay of the FDA’s approval of these generic products for up to thirty months under the Hatch-Waxman Amendments, specifically, 21 U.S.C. § 355(j)(5)(B)(iii). The End-Payor plain *367 tiffs, Mylan, Watson and the thirty States raise analogous state law causes of action for antitrust, unfair competition or unfair or deceptive trade practices, and/or unjust enrichment arising out of those same facts and circumstances (the “'365 Patent activities”).

Bristol-Myers moves pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss all of the claims raised by the antitrust plaintiffs in the antitrust actions (collectively, the “antitrust claims”).

I.

When considering a motion to dismiss, the Court “ ‘must accept the material facts alleged in the complaint[s] as true and construe all reasonable inferences in the plaintiffs’] favor.’” Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir.1995) (considering a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6)) (quoting Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir.1994)). The Court’s function on a motion to dismiss is “not to weigh the evidence that might be presented at trial but merely to determine whether the complaint[s] [themselves are] legally sufficient.” Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.1985). Therefore, Bristol-Myers’s present motion should only be granted if it appears that the antitrust plaintiffs can prove no set of facts in support of their respective claims that would entitle them to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Grandon v. Merrill Lynch & Co., 147 F.3d 184, 188 (2d Cir.1998); see also Goldman, 754 F.2d at 1065.

In deciding the motion, the Court may consider documents referenced in the Complaints and documents that are in the relevant antitrust plaintiffs’ possession or that they knew of and relied on in bringing suit. See Brass v. American Film Technologies, Inc., 987 F.2d 142, 150 (2d Cir.1993); Cor tec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir.1991); I. Meyer Pincus & Assoc., P.C. v. Oppenheimer & Co., Inc., 936 F.2d 759, 762 (2d Cir.1991); Skeete v. IVF America, Inc., 972 F.Supp.

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In Re Buspirone Patent Litigation, 185 F. Supp. 2d 363, 2002 U.S. Dist. LEXIS 2626, 2002 WL 243184 (S.D.N.Y. 2002).

185 F. Supp. 2d 363 (In Re Buspirone Patent Litigation) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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