In re Effexor Antitrust Litig.

337 F. Supp. 3d 435
CourtDistrict Court, D. New Jersey
DecidedSeptember 18, 2018
DocketCivil Action No. 3:11-cv-5661 (PGS)(LHG)
StatusPublished
Cited by6 cases

This text of 337 F. Supp. 3d 435 (In re Effexor Antitrust Litig.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Effexor Antitrust Litig., 337 F. Supp. 3d 435 (D.N.J. 2018).

Opinion

PETER G. SHERIDAN, U.S.D.J.

Presently before the Court is Defendants Wyeth Inc., Wyeth Manufacturing Limited, Wyeth Ireland Pharmaceutical Products (collectively, "Wyeth"), Teva Pharmaceuticals USA, Inc. and Teva Pharmaceuticals *442Industries Limited's (collectively, "Teva") Motion for Judgment on the Pleadings pursuant Federal Rule of Civil Procedure 12(c), regarding End-Payer Plaintiffs' Third Amended Consolidated Complaint. (ECF No. 165).1 This case arises from allegations that two drug companies, Wyeth and Teva, engaged in an anticompetitive scheme that prevented the generic drug of Effexor XR from entering the market. Plaintiffs are end-payor purchasers (hereinafter "EPP") who claim to have paid inflated costs for the brand-named drug, Effexor XR, due to, among other things, a delayed entry provision included in Wyeth and Teva's settlement agreement. Unlike the Direct Purchaser Plaintiffs, who assert claims under the Sherman Act, the EPPs base their claims on their respective state's antitrust and consumer protection acts.

BACKGROUND

I. Parties

Plaintiffs are a collection of organizations including insurance carriers, Taft-Hartley funds, municipalities, and individuals, who have been indirectly affected by Defendants' alleged schemes. For example, jointly administered Taft-Hartley fund and employee welfare benefit plaintiffs include: A.F.L.-A.G.C. Building Trades Welfare Plan and IBEW-NECA 505 Health & Welfare Plan, both of which are self-insured health and welfare benefit plans in Alabama and Florida, and Alabama, respectively (Id. at ¶¶ 20-21); Painters District Council No. 30 Health and Welfare Fund, a self-insured health and welfare benefit plan located in Illinois (Id. at ¶ 24); New Mexico United Food and Commercial Workers Union's and Employers' Health and Welfare Trust Fund and Plumbers and Pipefitters Local 572 Health and Welfare Fund, Taft-Hartley funds from New Mexico and Tennessee, respectively (Id. at ¶¶ 23, 25); Sergeants Benevolent Association Health and Welfare Fund, a New York health and welfare fund (Id. at ¶ 27). Health insurance carrier plaintiffs include Louisiana Health Services Indemnity Company d/b/a Bluecross/Blueshield of Louisiana, a corporation licensed to conduct business in Louisiana that provides health benefits to covered members. (Id. at ¶ 22). Municipality plaintiffs include the City of Providence, Rhode Island, a municipal corporation that operates a self-insured health and welfare benefit plan. (Id. at ¶ 26). Finally, there is one named individual Plaintiff, Patricia Sutter, who is a Maine citizen. (Id. at ¶ 28). All Plaintiffs purchased, paid, and/or provided reimbursement for Effexor XR or its generic equivalent. (Id. at ¶¶ 20-28). Plaintiffs contend that they were all injured as a result of Defendants' anticompetitive schemes, since they paid a premium for the medication. (Id . ).

Defendants in this case are Wyeth and Teva. (Id. at ¶¶ 29-38). Wyeth Inc., Wyeth Pharmaceuticals, Inc., Wyeth-Whitehall, and Wyeth Pharmaceuticals Company are referred to collectively as Wyeth. (Id. at ¶ 33). Wyeth is a wholly owned subsidiary of Pfizer with its principal place of business in New Jersey. (Id. at ¶ 29). Wyeth wholly owns Wyeth Pharmaceuticals, Inc., which is located in Pennsylvania. (Id. at ¶ 30). Wyeth-Whitehall Pharmaceuticals and Wyeth Pharmaceuticals Company are Puerto Rican corporations that are subsidiaries of Wyeth. (Id. at ¶¶ 31-32). The Complaint also identifies "Wyeth applicants," who are inventors and prosecuting *443attorneys that were responsible for purportedly fraudulently obtaining patents. (Id. at ¶ 34). Teva Pharmaceutical Industries Limited and Teva Pharmaceuticals USA, Inc. are referred to collectively as Teva. (Id. at ¶ 37). Teva Limited is an Israeli corporation that develops, manufactures, markets, and distributes pharmaceutical goods. (Id. at ¶ 36). Teva USA is a wholly owned subsidiary of Teva Limited that is located in Pennsylvania, which focuses its efforts primarily on the generic pharmaceuticals business. (Id . ).

II. Facts

In the Complaint, EPPs identify several anticompetitive schemes that purportedly give rise to the present lawsuit. Specifically, Plaintiffs allege that Defendants fraudulently obtained three separate, but related patents, from the United States Patent and Trademark Office (PTO); listed these patents in the book of Approved Drug Products with Therapeutic Equivalence Evaluations (the "Orange Book"); engaged in sham litigation relating to these patents; entered into an unlawful reverse payment agreement with Teva; and manipulated the 180 day first-to-file period2 to sustain Wyeth's and Teva's exclusivity and collectively prevent other generic companies from entering the market. The Court discusses each allegation in turn.

1. Walker Process and Fraudulent Procurement

EPPs first present a Walker Process3 claim against Wyeth, based on Wyeth's fraudulent procurement and enforcement of three separate patents. By way of background, in 1985, Wyeth - then operating as American Home Products - acquired a patent for the compound venlafaxine hydrochloride (venlafaxine ), commonly referred to as the Husbands patent. (Id. at ¶ 70). Five years later, December 1993, Wyeth received FDA approval of its New Drug Application for Effexor, an antidepressant drug whose active pharmaceutical ingredient is venlafaxine. (Id. at ¶ 71). This initial patent was for an "instant release" formulation; that is, the tablet "dissolves rapidly, resulting in a rapid increase in blood plasma levels of venlafaxine shortly after administration." (Id . ). According to the Complaint, the Husbands patent protected any type of venlafaxine-based product that Wyeth created from generic competition before June 13, 2008.4 (Id. at ¶ 72). As such, Wyeth had market exclusivity for venlafaxine products for 14½ years. (Id. at ¶ 73).

However, Effexor's instant release formulation had several significant drawbacks. First, the spike of venlafaxine into the patient's blood plasma levels could cause nausea and vomiting. (Id. at ¶ 75). Second, because the drug was rapidly absorbed into the body, patients were required to take the medication several times a day. (Id . ). In response, Wyeth sought to develop an extended release formulation of Effexor to address these drawbacks. (Id . ). According to the Complaint, "[b]y the early 1990s, methods for achieving sustained or extended release of the active ingredient in pharmaceuticals were well known in the drug industry." (Id. at ¶ 77). To create an extended release form of venlafaxine, Wyeth took two approaches: (1) they worked in-house and (2)

*444entered into a business venture agreement with ALZA Corporation, a pharmaceutical formulation company that specialized in extended release technology. (Id. at ¶ 79).

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337 F. Supp. 3d 435, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-effexor-antitrust-litig-njd-2018.