Lorazepam & Clorazepate Antitrust Litigation v. Mylan Laboratories, Inc.

202 F.R.D. 12, 2001 U.S. Dist. LEXIS 11991, 2001 WL 880782
CourtDistrict Court, District of Columbia
DecidedJuly 2, 2001
DocketNo. MDL 1290(TFH); MISC. 99MS276(TFH), CIV. 99-0790(TFH)
StatusPublished
Cited by62 cases

This text of 202 F.R.D. 12 (Lorazepam & Clorazepate Antitrust Litigation v. Mylan Laboratories, Inc.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lorazepam & Clorazepate Antitrust Litigation v. Mylan Laboratories, Inc., 202 F.R.D. 12, 2001 U.S. Dist. LEXIS 11991, 2001 WL 880782 (D.D.C. 2001).

Opinion

MEMORANDUM OPINION

HOGAN, Chief Judge.

Pending before the Court are the plaintiffs’ motion for class certification and the defendants’ motion to dismiss in this MDL antitrust action. The putative direct purchaser plaintiffs claim that as a result of the defendants’ anticompetitive behavior — specifically, the defendants’ conspiracy to monopolize, monopolization, and price fixing concerning certain generic anti-anxiety drugs — they paid enormously higher prices than they would have paid in a competitive market. En route to their ultimate goal of treble-damages under the Clayton Act for the overcharges they paid as a result of the alleged antitrust violations, the plaintiffs now seek class certification. The defendants, however, argue that the plaintiffs lack standing in this case to assert their claims. Upon careful consideration of the parties’ motions, the oppositions, replies, and sur-replies thereto, a hearing held in open court on June 14, 2001, and the entire record herein, the Court will deny the defendants’ motion to dismiss and grant the plaintiffs’ motion for class certification.

I. BACKGROUND

For purposes of the instant motions for class certification and to dismiss, the Court will accept as true the allegations of the plaintiffs’ complaint. See, e.g., Shelter Realty Corp. v. Allied, Maintenance Corp., 574 F.2d 656, 661 n. 15 (2d Cir.1978); FTC v. Mylan Labs., Inc., 62 F.Supp.2d 25, 33 (D.D.C.1999). The facts below are presented accordingly and do not constitute factual findings.1

The four named plaintiffs — Advocate Health Care (“Advocate”); St. Charles Hospital and Rehabilitation Center (“St. Charles”); Dik Drug Company (“Dik Drug”); and Harvard Pilgrim Health Care, Inc. (“Harvard Pilgrim”) — have brought this action as a class action pursuant to Federal Rule of Civil Procedure 23 on behalf of themselves and a purported class of direct purchasers of generic anti-anxiety drugs known as lorazepam and elorazepate during the pe[15]*15riod January 12, 1998 through the present. See Compl. 1111. They claim that the defendants conspired to monopolize, monopolized, and fixed prices of lorazepam and cloraze-pate, in violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2.2 Advocate is an Illinois not-for-profit corporation that is the largest fully integrated health care delivery system in metropolitan Chicago. Through a subsidiary it operates eight hospitals, and with more than 4,000 affiliated physicians it has Chicago’s largest physician network. See id. H 7. St. Charles is a New York not-for-profit organization that offers a broad range of medical, surgical, and rehabilitation services at its community teaching and regional rehabilitation hospital. See id. 118. Dik Drug is a regional wholesale distributor, organized under Illinois law, of over 28,000 drugs to over 900 independent retail pharmacies, hospitals, and nursing home providers. See id. 119. Finally, Harvard Pilgrim is a Massachusetts not-for-profit managed healthcare company providing health benefit plans to approximately 1.35 million members throughout New Hampshire, Rhode Island, and Massachusetts. It is a licensed health maintenance organization (“HMO”) in Massachusetts and Maine. It also has affiliated HMOs in New Hampshire, Rhode Island, and Massachusetts. Its products include point-of-service plans, preferred provider organizations, traditional health maintenance organization, and Medicare and Medicaid plans. See id. 1110. The plaintiffs allege that during the relevant class period they each “purchased generic lorazepam and clo-razepate tablets directly from Mylan at prices set by Mylan pursuant to contract.” Id. HU 7-10.

The defendants — Mylan Laboratories, Inc. (“Mylan Laboratories”), Mylan Pharmaceuticals, Inc. (“Mylan Pharmaceuticals”), UDL Laboratories, Inc. (“UDL”), Cambrex Corporation (“Cambrex”), Profarmaco S.R.L. (“Profarmaco”), Gyma Laboratories of America, Inc. (“Gyma”), and SST Corporation (“SST”) — are all involved in the supply side of the generic drug industry. Mylan Laboratories is a Pennsylvania corporation engaged in developing, licensing, manufacturing, marketing, and distributing generic and proprietary pharmaceutical and wound care products, including at least 91 generic drugs. Mylan Pharmaceuticals, a wholly owned subsidiary of Mylan Laboratories, is one of the world’s largest generic drug companies. UDL, another wholly owned subsidiary of Mylan Laboratories, maintains manufacturing and research and development facilities in Illinois. See id. 1t 18. Cambrex manufactures and sells chemicals for pharmaceuticals, cosmetics, agriculture, and other industrial uses. See id. 1120. Profarmaco, located in Italy, is a wholly owned subsidiary of Cambrex that manufactures chemicals including APIs, which is the most essential raw material for a pharmaceutical product, and sells them to manufacturers of drugs in the United States and elsewhere. See id. 1121. Gyma is a New York corporation in the business of selling APIs and other chemicals to the pharmaceutical industry. It buys APIs from Profarmaco and other firms and resells them to generic drug manufacturers in the United States. See id. K 22. Finally, SST is a New Jersey corporation that is also engaged in the business of selling APIs and other chemicals to the pharmaceutical industry. It buys APIs from Fabricca Italiana Sintetici SpA (“FIS”) and other firms and resells them to generic drug manufacturers in the United States. See id. U 23.

Generic drugs, which are chemically identical versions of branded drugs, cannot be marketed until after the patent on the branded drugs has expired. Firms that manufacture and market generic drugs often specialize in such drugs, although Mylan manufactures both generic and branded drugs. Generic drugs are sold at substantial discounts from the price of branded drugs. See Compl. H 25.

Mylan and other generic drug manufacturers require the approval of the Food and [16]*16Drug Administration (“FDA”) to market a generic product in the United States. For each generic drug, the manufacturer must file an Abbreviated New Drug Application (“ANDA”) with the FDA to establish that its version of the drug is therapeutically equivalent to the branded drug. FDA approval of an ANDA takes an average of about 18 months. See id. H 26.

The generic manufacturer typically purchases the Active Pharmaceutical Ingredient (“API”) from a specialty chemical manufacturer such as SST or Gyma. The generic manufacturer combines the API with inactive filters, binders, colorings and other chemicals to produce a finished product. To sell an API in the United States, the API supplier must file a Drug Master File (“DMF”) with the FDA. The DMF explains the processes that the API supplier uses to make the API and to test chemical equivalence and bioequi-valence to the brand product. To use an API, the generic manufacturer’s ANDA must refer to the API supplier’s DMF filed with the FDA. More than one drug manufacturer can reference the DMF of the same API supplier. A generic manufacturer that wants or needs to change its API supplier must obtain FDA approval of an ANDA supplement which includes a reference to the new supplier’s DMF and test results regarding the generic manufacturer’s product using the new API.

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Bluebook (online)
202 F.R.D. 12, 2001 U.S. Dist. LEXIS 11991, 2001 WL 880782, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lorazepam-clorazepate-antitrust-litigation-v-mylan-laboratories-inc-dcd-2001.