In re Terazosin Hydrochloride Antitrust Litigation

220 F.R.D. 672
CourtDistrict Court, S.D. Florida
DecidedApril 8, 2004
DocketNo. 99-MDL-1317
StatusPublished
Cited by81 cases

This text of 220 F.R.D. 672 (In re Terazosin Hydrochloride Antitrust Litigation) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Terazosin Hydrochloride Antitrust Litigation, 220 F.R.D. 672 (S.D. Fla. 2004).

Opinion

ORDER GRANTING INDIRECT PURCHASER PLAINTIFFS’ MOTIONS FOR CLASS CERTIFICATION OF STATE-WIDE CLASSES

SEITZ, District Judge.

THIS CAUSE is before the Court upon the Indirect Purchaser Plaintiffs’ (“IPPs”) Motions for Class Certification of a StateWide Class of End-Payers in: Alabama [DE-453], California [DE-452], the District of Columbia [DE-451], Florida [DE-450], Illinois [DE-464], Kansas [DE-463], Maine [DE-462], Michigan [DE-461], Minnesota [DE-460], Mississippi [DE-59], Nevada [DE-458], New Jersey [DE-457], New Mexico [DE-455], New York [DE-456], North Carolina [DE-454], North Dakota [DE-465], South Dakota [DE-466], West Virginia [DE-467], and Wisconsin [DE-468]. Upon review of the Motions and supporting memoranda, the Defendants’ joint opposition, Indirect Purchaser Plaintiffs’ Reply, the parties’ supplemental briefings, and oral argument, the Court will GRANT the Indirect Purchasers’ Motions for Class Certification of a StateWide Class of End Payers with the exception of the Motion for Class Certification in the District of Columbia [DE-451], which is DENIED, and the Motion for Class Certification in New Jersey [DE-457], which is DENIED AS MOOT.1

1. Factual Background

This case arises from Indirect Purchaser Plaintiffs’ assertion of antitrust injury and unjust enrichment in nineteen states, based on the allegedly anti-competitive conduct of Defendants Abbott Laboratories (“Abbott”), Geneva Pharmaceuticals, Inc. (“Geneva”), and Zenith Goldline Pharmaceuticals, Inc. (“Zenith”)2. Since 1987, Abbott has been [676]*676exclusively manufacturing and marketing the chemical compound terazosin hydrochloride under the brand name “Hytrin,” a drug used for the treatment of hypertension and enlarged prostate. Both Geneva and Zenith are generic drug manufacturers that developed generic versions of Hytrin for sale in the United States. Indirect Purchaser Plaintiffs assert that two 1998 agreements, one between Abbott and Geneva and another between Abbott and Zenith, violated the laws of the various states and resulted in delayed domestic competition for the sale of terazosin hydroeholoride. Indirect Purchaser Plaintiffs further allege that Abbott unlawfully extended its monopoly power over the market for terazosin hydrochloride by misusing its Hytrin patents, ignoring certain regulations issued by the Food and Drug Administration (“FDA”), and engaging in baseless patent litigation against Geneva and Zenith. The relevant facts of the case, which firmly situate this case in the complex intersection of antitrust and patent law, are as follows:

A. The Regulatory Framework and Abbott’s Patent Litigation

Under federal law, FDA approval is required before a company may begin selling a new drug in interstate commerce in the United States.3 Applications for FDA approval can be filed as either new drug applications (“NDA”) or abbreviated new drug applications (“ANDA”). If FDA approval is granted pursuant to an NDA, the drug manufacturer is issued a new patent which allows the patent owner to exclude others from making, using, or selling the drug in the United States for the duration of the patent. Upon approval by the FDA, information regarding any claimed patents are listed in a publication known as the Orange Book.

As a patent nears expiration, generic manufacturers often seek to market the generic version of brand name drugs that the FDA previously approved as an NDA. In that case, the Drug Price Competition and Patent Term Restoration At of 1984, 21 U.S.C. • § 355 (“the Hatch-Waxman Act”) permits the generic drug manufacturers to seek expedited FDA approval by filing an ANDA pursuant to 21 U.S.C. § 355(j). While the NDA applicant must submit safety and efficacy studies for every proposed new drug, ANDA applicants may rely on the safety and efficacy data already filed with the FDA by the manufacturer of the equivalent brand name drug.

After a generic applicant has submitted its ANDA to the FDA, it must file a patent certification with respect to each patent claiming the listed drug (or a method of using the listed drug) of which the applicant is aware. In so doing, the applicant must certify that: (1) the patent information has not been filed with the FDA; (2) the underlying patent is expired; (3) the patent will expire, identifying the expiration date; or (4) the patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug. If the applicant certifies either that the patent information has not been filed or that the patent is expired, the FDA approval of the ANDA can proceed immediately. If the patent has not yet expired, the ANDA will not be approved until after the expiration date of the relevant patent. However, if the certification falls into the fourth category (known as a “paragraph IV certification”), the applicant must notify the patent holder, who then has the statutory right to bring suit for patent infringement, which will automatically delay approval of the ANDA for a period of thirty months.

Abbott holds a number of patents permitting it to manufacture and market drugs containing the chemical compound terazosin hydrochloride. Specifically, between 1977 and 1996, the United States Patent and Trademark Office (“the PTO”) issued Abbott seven different patents covering various tera-zosin formulations. According to Indirect Purchaser Plaintiffs, prior to March 1995, only three of Abbott’s patents relating to Hytrin had been submitted to the FDA for [677]*677listing in the Orange Book. Indirect Purchaser Plaintiffs contend that Abbott’s other claimed patents are invalid “add-on” patents. Add-on patents, as Indirect Purchaser Plaintiffs explain, are those that are improperly-obtained and listed in the Orange Book with expiration dates long after the expiration date of the patent for the active ingredient. The purpose of listing such an “add-on” patent on the eve of an anticipated ANDA application, as Indirect Purchaser Plaintiffs’ allege Abbott did, is to be able to initiate a patent infringement suit against the ANDA applicant and to trigger the automatic thirty-month stay under the Hatch-Waxman Act. It can, therefore, be used as a blockade by the brand-name drug manufacturer to delay generic competition.

Because of Hytrin’s success in the pharmaceutical market,4 in the early 1990s, several generic drug makers including Geneva and Zenith began taking steps to develop generic versions of Hytrin that contained the same active chemical components but different inactive ingredients. For instance, between 1993 and 1996, Geneva filed four ANDAs based on Abbott’s NDA for Hytrin, each time making paragraph IV certifications. In September 1994, Abbott exercised its statutory right to sue Geneva for patent infringement and initiated several actions against Geneva in the United States District Court for the Northern District of Illinois. The ensuing litigation, as alleged by Indirect Purchaser Plaintiffs, delayed Geneva’s efforts to market its own generic drug for an indefinite period of time pending resolution of the parties’ ongoing patent disputes. Abbott also instituted legal actions against Zenith in 1994 and 1995, after-it learned that Zenith had filed an ANDA for a terazosin hydrochloride drug.

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220 F.R.D. 672, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-terazosin-hydrochloride-antitrust-litigation-flsd-2004.