United States District Court, D. Massachusetts
MEMORANDUM OF DECISION AND ORDER ON DEFENDANTS'
MOTION TO COMPEL PLAINTIFFS' SALES, PRICING, AND PREMIUM
Gail Dein United States Magistrate Judge.
matter is before the court on Defendants' Motion to
Compel Discovery of Plaintiffs' Sales, Pricing, and
Premium Information. (Docket No. 220). As the defendants have
described the scope of their motion:
Here, Defendants seek production by the Direct Purchaser
Plaintiffs of certain sales and pricing information, as well
as sales contracts and strategy documents. This discovery,
which will reflect the relative prices of oral dosage
ulcerative colitis treatments sold alongside the drugs at
issue in this case - Asacol, Asacol HD and Delzicol - is
relevant to defining the product market. It also bears
directly on whether the End Purchaser Plaintiffs were injured
at all under state law, or instead are simply seeking to reap
a windfall duplicative recovery.
Defendants also seek information on End Payor Plaintiffs'
premiums and profitability. State laws limit EPPs'
recovery to actual damages. To the extent EPPs passed on to
enrollees some or all of the alleged overcharges by way of
premiums, the amount of that pass-on would reduce their
actual damages. Moreover, variations in such pass to members
of any alleged overcharge through premiums may demonstrate
class treatment is not appropriate here.
Defs. Mem. (Docket No. 221) at 1. While the plaintiffs object
to producing any of this information, in an effort at
compromise the DPPs have agreed to produce their sales data
for the Asacol Products. See DPP Mem. (Docket No.
235) at 2. The parties shall meet and confer to determine if
the defendants are prepared to accept this offer, without
waiver of the defendants' rights to continue to seek
broader discovery. For the reasons detailed herein, the
motion to compel is otherwise denied without prejudice.
defendants have requested that the DPPs produce
“transaction data showing the Wholesaler DPPs'
sales and pricing to indirect purchasers like retailers and
pharmacies, and the Retailer DPPs' sales and pricing to
their customers[, ]” purchase and sales contracts
“reflecting the terms and conditions of the purchase
and sale of oral dosage ulcerative colitis treatments between
wholesalers and their customers like retailers and
pharmacies[, ]” and sales and pricing strategy
documents “sufficient to show DPPs' strategies,
policies, and practices for setting prices for and selling to
their respective customers wholesale and retail.” Defs.
Mem. at 2. It is well-established that such “downstream
discovery, ” while “not absolutely prohibited,
” “is generally disfavored.” In re
Solodyn (Minocycline Hydrochloride) Antitrust Litig.,
MDL No. 14-2503-DJC, 2016 WL 6897809, at *2 (D. Mass. Sept.
19, 2016) (and cases cited). Nevertheless, the defendants
contend that the requested discovery is necessary to (1)
define a relevant product market; (2) counter the EPPs'
damage claims and prevent “duplicative
recoveries” by DPPs and EPPs; and (3) determine the
existence of “cost plus” contracting at the
wholesaler level. Each of these arguments will be discussed
Information Needed to Define the Product
have requested sales and pricing information from the DPPs in
order to establish that “the relevant product market is
broader than Plaintiffs assert and that a variety of
pharmaceutical products are therapeutically substitutable,
and in practice are substituted, in the market for ulcerative
colitis treatments.” Defs. Mem. at 4. Thus, the
defendants argue, documents showing “the pricing
interaction among Asacol, Asacol HD, Delzicol, and their
closest substitutes” “will allow the parties and
the Court to determine the relevant market.”
Id. For the reasons addressed in this court's
Memorandum of Decision and Order on Defendants' Motion to
Compel Product Market Discovery, the defendants have failed
to establish that the requested information would be useful
in defining the relevant market.
DPPs have accurately summarized the record before this court:
[W]holesaler sales data is not useful in defining a relevant
product market under the circumstances of this case, and
Defendants offer no expert opinion to the contrary. Relevant
markets are defined in terms of cross-elasticity at the
consumer level, i.e., the extent to which raising
the price of one product above the competitive level causes
consumers to shift their purchasing choices. The data that
Defendants are asking for is not useful in analyzing that
issue for the simple reason that Plaintiffs either do not
sell to consumers or sell to such a small fraction of the
market that their data would be useless for these purposes.
If a plaintiff's purchases or sales of Asacol go down
after a price increase on Asacol, there is no way to
determine whether the lost sales represent patients who
stopped taking the drug, began taking a different drug, or
started getting their prescriptions filled at a pharmacy
served by a different wholesaler. Finally, there are better
sources of data available to study market definition.
Marketwide data is available from third-party sources like
IMS Health; Defendants possess and use such third-party
marketwide data for their own business purposes. There is no
need for production of Plaintiffs' sales data.
DPP Mem. at 1-2. Nevertheless, the DPPs have agreed to
produce their sales data for the Asacol Products. This offer
was rejected by the defendants initially, since the
defendants wanted information about other products as well.
The parties shall meet and confer following this decision to
determine whether the defendants want to accept the offer of
the sales data for Asacol Products only, without waiver of