VALUE DRUG COMPANY v. TAKEDA PHARMACEUTICALS, U.S.A., INC.

District Court, E.D. Pennsylvania·Decided April 25, 2022·No. 2:21-cv-03500·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA VALUE DRUG COMPANY : CIVIL ACTION v. NO. 21-3500 TAKEDA PHARMACEUTICALS, U.S.A., INC., et al. :

ORDER - MEMORANDUM AND NOW, this 25" day of April 2022, upon considering Watson Laboratories, Inc., Amneal Pharmaceuticals LLC, Teva Pharmaceuticals Industries, and Teva Pharmaceuticals USA, Inc.’s Motion for reconsideration or leave to file an interlocutory appeal (ECF Doc. No. 213) of our March 30, 2022 Order (ECF Doc. No. 207) granting in part and denying in part their joint Motion to Dismiss (ECF Doc. No. 169), Plaintiff's Response (ECF Doc. No. 240), and for reasons below, it is ORDERED the Motion for reconsideration or leave to file an interlocutory appeal (ECF Doc. No. 213) is DENIED. Analysis Generic Colcrys manufacturers Watson Laboratories, Inc., Amneal Pharmaceuticals LLC, Teva Pharmaceuticals Industries, and Teva Pharmaceuticals USA, Inc. ask we reconsider our March 30, 2022 Order denying in part their joint Motion to dismiss a pharmacy buyer’s antitrust claims against them.! They argue our March 30, 2022 Order rests on two mistaken factual premises: (1) we overstated the benefit they received from the conspiracy by suggesting their 135 days of limited competition was certain, not speculative; and (2) we misstated Watson and

' ECF Doc. No. 213-1 at 4. We refer to the moving parties as Watson and Amneal and write for the parties given their extensive familiarity with these issues more fully addressed in our December 29, 2021 and March 30, 2022 opinions. ECF Doc. Nos. 157, 207.

Amneal would not compete against Par’s generic when they entered the market, but they in fact would have competed with Par under the terms of the settlement agreements. We are not persuaded by either argument. We also decline leave to file an interlocutory appeal. A motion for reconsideration may only be granted where the moving party shows: “(1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court granted the [previous] motion . . .; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice.”? Watson and Amneal argue we must grant the motion for reconsideration and dismiss the first amended class action Complaint against them because our reasoning rests on two incorrect, material factual statements. We disagree we misstated any fact as it relates to Watson and Amneal’s first argument. And Watson and Amneal’s second argument seems to rest either on our lack of clarity in, or their misunderstanding of, our March 30, 2022 opinion. We hope to make it as clear as we can: Watson and Amneal present fact issues inappropriate to resolve in their favor on a motion to dismiss. We decline to grant leave to file an interlocutory appeal as our March 30, 2022 Order does not raise a controlling question of law. We correctly described the benefit of the limited competition period. Watson and Amneal first argue we suggested “Amneal and Watson were certain to achieve 135 days of limited competition” but we are “indisputably mistaken” because “under the written terms of the settlement agreements themselves {] Amneal and Watson could enjoy 135 days of limited competition only if no other ANDA filer unilaterally entered the market unilaterally [sic], (i.e. without authorization from Takeda).”? In essence, Watson and Amneal

2 Max’s Seafood Café ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). 3 ECF Doc. No. 213-1 at 7 (emphasis in original).

argue the “135-day limited competition period was only a possibility, not a certainty.”* Watson and Amneal seize on our December 29, 2021 opinion recognizing Value Drug’s theory depended on (but the pleading failed to adequately plead or address) the non-conspiring generics staying off the market.’ We disagree our factual recitation is “indisputably mistaken” or it warrants a change in our finding. And Value Drug cured the deficiency raised in our December 29, 2021 opinion with its amended pleading. Value Drug pleads substantial facts about this “Third Wave” of filers, including the possibility they could disrupt the conspiracy.° But Value Drug pleads Takeda entered into settlement agreements with the Third Wave, which provided entry dates 135 days after Watson and Amneal and other entry date options just as the conspiring Generics had in their agreements.’ And Value Drug pleads the Third-Wave filers had no economic incentive to litigate their patent infringement suits with Takeda to verdict “when [their] only reward would be the entry of all other ANDA filers that had obtained FDA approval, including Amneal and Watson. In such circumstances, a Third Wave ANDA filer may not even recoup its litigation expenses by competing.”® Value Drug adequately pleads facts ameliorating our previous concern about the plausibility of the conspiracy when not all market participants assented to it.

Wd > Id. at 7-8. 6 ECF Doc. No. 163 §f§ 126-128, 135-36. 1 Id. 127-28. 8 Id. 136.

We are also not persuaded by Watson and Amneal’s argument Mylan launching “at risk” purportedly proves the purely speculative benefit of the conspiracy.? Value Drug pleads no other Third-Wave ANDA filer for Colcrys had an incentive to litigate costly patent infringement litigation to verdict which would cause them to settle with Takeda. And they did all in fact settle.!° It is clear from Value Drug’s pleading—and Takeda and Par’s actions—no one expected Mylan to argue, let alone succeed in arguing, a decision in the unrelated Mitigare litigation would permit Mylan to launch under its license agreement with Takeda.'! Takeda and Par strenuously argued the Mitigare decision did not permit Mylan to launch while seeking a preliminary injunction to stop it and protect the aims of the conspiracy.!* We are satisfied based on Value Drug’s pleading Takeda and the Generics did not anticipate a Third-Wave filer would (1) litigate the patent infringement case to verdict, or (2) successfully argue a decision in unrelated litigation permits it to launch and thwart the aims of the conspiracy. That an unexpected event occurred to disrupt the conspiracy does not lead us conclude the conspiracy is implausible from the outset. And while Watson and Amneal suggest we “overstate” the value it received, we find Watson and Amneal grossly overstate the “speculative” benefit—if you can describe it as such—if the conspiracy continued. Value Drug’s pleading adequately addresses the Third-Wave ANDA filers and Mylan’s unexpected launch.

9 It is unclear if Mylan launched “at risk” as argued by Watson and Amneal. Jd. 127(b)c), 160. Value Drug pleads Mylan launched under the “Final Court Provision” in its license agreement with Takeda. Jd. | 127(b)-{c), 160. 10 Id. FF 126-128, 135-36. Tq 12 Td 4§ 160-69.

We do not find Watson and Amneal’s argument about the speculative nature of their benefit persuasive. Watson and Amneal misunderstand our March 30 opinion. Watson and Amneal next argue we incorrectly stated Watson and Amneal’s benefit partially derived from only competing with Takeda’s authorized generic sold through Par rather than Par’s generic and Takeda’s authorized generic sold through Prasco. Whether we misstated this fact is immaterial to our holding. Our holding does not change because Watson and Amneal’s argument about motive or the conspiracy “making no economic sense” for them raises fact issues we cannot resolve in their favor on a motion to dismiss. We informed Watson and Amneal their argument may have merit on summary judgment in our previous opinion, but it is inappropriate to raise at this pleading stage. We find the same today. Because it seems we may have sacrificed clarity for brevity in our previous opinion, we detail why we find fact issues in Watson and Amneal’s argument here rather than summarily upholding our previous finding.

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VALUE DRUG COMPANY v. TAKEDA PHARMACEUTICALS, U.S.A., INC., (E.D. Pa. 2022).

VALUE DRUG COMPANY v. TAKEDA PHARMACEUTICALS, U.S.A., INC. (VALUE DRUG COMPANY v. TAKEDA PHARMACEUTICALS, U.S.A., INC.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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