United States District Court, D. Massachusetts
IN RE SOLODYN (MINOCYCLINE HYDROCHLORIDE) ANTITRUST LITIGATION
MEMORANDUM AND ORDER
J. Casper, United States District Judge
a putative class action in which the Direct Purchaser
Plaintiffs (“DPPs” or “direct
purchasers”) allege that Defendants Medicis
Pharmaceutical Corporation (“Medicis”), Impax
Laboratories, Inc. (“Impax”), Sandoz Inc.
(“Sandoz”) and Lupin Limited and Lupin
Pharmaceuticals, Inc. (collectively, “Lupin”)
(collectively, “Defendants”), violated Section 1
of the Sherman Act, 15 U.S.C. § 1. D. 91. Additionally,
putative class representatives of End-Payor Plaintiffs
(“EPPs” or “end-payors”) allege that
Defendants have violated various state laws. D. 92. EPPs have
moved for class certification, D. 569, and DPPs have also
moved for class certification, D. 574. For the reasons set
forth below, the Court ALLOWs DPPs' motion for class
certification under Fed.R.Civ.P. 23(b)(3) and ALLOWS
EPPs' motion for class certification under Fed.R.Civ.P.
23(b)(3), but DENIES EPPs' motion for certification under
is a drug-a minocycline hydrochloride extended release
tablet-that treats inflammatory lesions resulting from acne
in patients age twelve and older, and is manufactured,
marketed and sold by Medicis. See, e.g., D. 570 at
11; D. 575 at 10; D. 576-1 ¶ 6; D. 577 ¶ 7; D. 611
at 6. Medicis received a patent on the brand Solodyn from the
FDA in 1999, and in 2006, the FDA approved Medicis's New
Drug Application (“NDA”) for three dosages of
Solodyn: 45mg, 90mg and 135mg (“Legacy
Strengths”). D. 570 at 11; D. 576-2 ¶ 14; D. 611
at 6. In October 2007, Impax submitted an Abbreviated New
Drug Application (“ANDA”) to the FDA, seeking to
market generic versions of Legacy Strength Solodyn. D. 570 at
11. On November 26, 2008, Medicis and Impax entered into two
agreements, by which Impax agreed to abandon its challenge to
Medicis's patent, and Medicis paid Impax approximately
$40 million. D. 570 at 12; D. 575 at 11. On February 3, 2009,
Impax received FDA approval on its ANDA. D. 570 at 12; D. 575
at 13. Impax did not begin selling generic Solodyn until
November 2011. D. 570 at 13; D. 575 at 13.
interim, Teva, Sandoz and Mylan launched generic Solodyn
“at risk”-without having received FDA
approval-for brief periods. D. 570 at 12; D. 575 at 13; D.
598 at 7; D. 611 at 7. “[W]ithin days” of
launching, each generic manufacturer entered into an
agreement with Medicis and stopped selling generic Solodyn.
D. 575 at 13; see D. 570 at 12; D. 598 at 7; D. 611
at 7. The generic manufacturers then re-launched sales of
generic Legacy Strength Solodyn in November 2011. D. 570 at
13; D. 575 at 14.
March 2009, when Teva launched its generic Solodyn at-risk,
and November 2011, Medicis also launched a series of
promotion programs including co-pay card and coupon programs,
in which patients participated “at high rates.”
D. 598 at 8. In 2009 and 2010, Medicis launched sales of
additional dosages of Solodyn: 55mg, 65mg, 80mg, 105mg and
115mg (“AddOn Strengths”). D. 575 at 16. Medicis
ceased sale of Legacy Strengths in July 2011. Id.
According to their respective agreements with Medicis,
generic manufacturers will delay launch of generic Add-On
Strength Solodyn until at least February 2018. D. 570 at 12.
2013, DPPs, direct purchasers of Solodyn, brought the first
antitrust suit against Defendants in the United States
District Court for the Eastern District of Pennsylvania.
Rochester Drug Co-Operative, Inc. v. Medicis Pharm.
Corp., No. 2:13-cv-04270-JCJ (E.D. Pa. July 23, 2013).
Shortly thereafter, various EPPs, consumers and third-party
payors who indirectly purchased, paid for or provided
reimbursement for Solodyn other than for resale, filed suit.
See D. 2. On February 25, 2014, the Judicial Panel
on Multidistrict Litigation ordered all Solodyn antitrust
actions centralized and transferred those and two subsequent
actions to this Court. D. 2; D. 153; D. 156. The DPPs and
EPPs filed their respective consolidated amended complaints
on September 15, 2014. D. 91; D. 92. On August 14, 2015, this
Court allowed in part and denied in part Defendants'
motion to dismiss, D. 110. D. 184; D. 203. EPPs have now
filed a motion for class certification. D. 569. DPPs have
also filed a motion for class certification. D. 574. The
Court heard the parties on the pending motions and took the
matters under advisement. D. 645.
Burden of Proof and Standard of Review
action may be certified only if “(1) the class is so
numerous that joinder of all members is impracticable; (2)
there are questions of law or fact common to the class; (3)
the claims or defenses of the representative parties are
typical of the claims or defenses of the class; and (4) the
representative parties will fairly and adequately protect the
interests of the class.” Fed R. Civ. P. 23(a); In
re New Motor Vehicles Canadian Export Antitrust Litig.,
522 F.3d 6, 18 (1st Cir. 2008). Where, as here, both putative
classes have moved to certify the class under Fed.R.Civ.P.
23(b)(3), the Court must also determine whether
“questions of law or fact common to class members
predominate over any questions affecting only individual
members, and that a class action is superior to other
available methods for fairly and efficiently adjudicating the
controversy.” Fed R. Civ. P. 23(b)(3); New Motor
Vehicles, 522 F.3d at 18-19. “[T]he district court
must undertake a ‘rigorous analysis' to determine
whether plaintiffs me[e]t the four threshold requirements of
Rule 23(a) (numerosity, commonality, typicality, and adequacy
of representation) and Rule 23(b)(3)'s two additional
prerequisites.” In re Nexium Antitrust Litig.,
777 F.3d 9, 17 (1st Cir. 2015) (“Nexium
III”) (quoting Comcast Corp. v.
Behrand, 569 U.S. 27, 33 (2013)).
also move for class certification under Rule 23(b)(2). D. 570
at 28. To certify the class under Rule 23(b)(2), the Court
must determine whether defendants have “acted or
refused to act on grounds that apply generally to the class,
so that final injunctive relief or corresponding declaratory
relief is appropriate respecting the class as a whole.”
Fed.R.Civ.P. 23(b)(2); see New Motor Vehicles, 522
F.3d at 12 n.8. This form of class certification
“ordinarily is used when broad, class-wide injunctive
or declaratory relief is appropriate.” McKenna v.
First Horizon Home Loan Corp., 475 F.3d 418, 427 (1st
Cir. 2007). It “does not extend to cases in which the
appropriate final relief relates exclusively or predominantly
to money damages.” Fed.R.Civ.P. 23(b)(2) advisory
committee's note to 1966 amendment; see DeRosa v.
Mass. Bay Commuter Rail Co., 694 F.Supp.2d 87, 95 (D.
plaintiffs bear the burden of showing that all the
prerequisites for a class action have been met. Makuc v.
Am. Honda Motor Co., Inc., 835 F.2d 389, 394 (1st Cir.
1987). Plaintiffs “need not make that showing to a
degree of absolute certainty. It is sufficient if each
disputed requirement has been proven by a preponderance of
the evidence.” Nexium III, 777 F.3d at 27
(quoting Messner v. Northshore Univ. HealthSystem,
669 F.3d 802, 811 (7th Cir. 2012)) (internal quotation marks
omitted). The “rigorous analysis” required under
Rule 23(b) does not “require raising the bar for
plaintiffs higher than they would have to meet in
individual suits.” Id. at 20 (emphasis in
original). “Once plaintiffs have made their initial
showing, defendants have the burden of producing sufficient
evidence to rebut the plaintiff's showing.”
Id. at 27. The Court will address each putative
class in turn.
The Direct Purchasers
allege that the Defendants have unreasonably restrained trade
in violation of Section 1 of the Sherman Act, 15 U.S.C.
§ 1, by perpetuating reverse-payment settlements. D. 91.
For such claims, guided by FTC v. Actavis, Inc., ___
U.S. ___, 133 S.Ct. 2223 (2013), courts apply the
“rule-of-reason” analysis to determine
“whether under all the circumstances of the case the
restrictive practice imposes an unreasonable restraint on
competition, ” Arizona v. Maricopa Cnty. Med.
Soc'y, 457 U.S. 332, 343 (1982). The rule-of-reason
analysis is a burden-shifting test: first, the plaintiff must
show “that the challenged action has had an
actual adverse effect on competition as a whole in
the relevant market”; if shown, the defendant must then
show “that the agreement was formed for legitimate
business purposes which outweigh any anti-competitive
effects”; and if that is shown, the plaintiff must then
show “that the legitimate ends of the agreement could
have been accomplished through less restrictive
alternatives.” Addamax Corp. v. Open Software
Found., Inc., 888 F.Supp. 274, 279 (D. Mass. 1995)
(emphasis in original).
seek to certify a class with forty-eight members,
defined as follows:
All persons or entities in the United States and its
territories, including Puerto Rico, who purchased (a) 45mg,
55mg, 65mg, 80mg, 90mg, 105mg, 115mg, and/or 135mg brand or
generic Solodyn tablets directly from any Defendant or other
manufacturer at any time during the period July 23, 2009
through and including November 25, 2012 and/or (b) 55mg,
65mg, 80mg, 105mg, and/or 115mg brand Solodyn tablets
directly from Medicis at any time from November 26, 2012
until November 30, 2015. Excluded from the Class are
Defendants, and their officers, directors, management,
employees, subsidiaries, or affiliates, and all federal
575 at 9. The DPPs argue that the putative class
meets all of the required factors established by Rule 23.
D. 575 at 19-31. The Defendants do not dispute that the
DPPs meet Rule 23's requirements of typicality,
commonality and adequate representation. See
D. 598; D. 611. Rather, Defendants argue only that this
putative class is not “so numerous that joinder
would be impractical, ” Fed.R.Civ.P. 23(a)(1), and
that even if numerosity is satisfied, the Plaintiffs have
failed to show that issues common to the class
predominate over individual questions, as required by
Rule 23(b)(3). D. 611 at 10-28. The Court thus focuses on
those factors in dispute.
Numerosity Is Satisfied Here
certify a class action, the class must b] so numerous that
joinder of all members would be “impracticable.”
Fed.R.Civ.P. 23(a)(1). “‘Impracticability'
does not mean ‘impossibility, ' but only the
difficulty or inconvenience of joining all members of the
class.” Advert. Specialty Nat. Ass'n v.
FTC, 238 F.2d 108, 119 (1st Cir. 1956). “No
minimum number of plaintiffs is required” to
demonstrate impracticability, “but generally if the
named plaintiff demonstrates that the potential number of
plaintiffs exceeds 40, the first prong of Rule 23(a) has been
met.” García- Rubiera v.
Calderón, 570 F.3d 443, 460 (1st Cir. 2009)
(quoting Stewart v. Abraham, 275 F.3d 220, 226-27
(3d Cir. 2001)); see In re Relafen Antitrust Litig.,
218 F.R.D. 337, 342 (D. Mass. 2003). The Court may also take
into account such “subjective factors” as the
“geographic location of proposed class members, the
nature of the action, and matters of judicial economy.”
Nexium II, 296 F.R.D. at 52. Impracticability is a
matter of discretion for the Court, see Advert.
Specialty, 238 F.2d at 119, and courts have certified
smaller classes in generic suppression cases where judicial
economy favors proceeding as a class action, see,
e.g., Nexium II, 296 F.R.D. at 53 (certifying
class of twenty-four or twenty-nine); Dale Elecs., Inc.
v. R.C.L. Elecs., Inc., 53 F.R.D. 531, 535-36 (D.N.H.
1971) (certifying class of thirteen).
propose a class of forty-eight members and argue joinder is
impracticable due to both the size of the class and the
geographic dispersion of the members. D. 575 at 19-20.
Defendants argue that DPPs' calculations of class
membership at forty-eight members does not account for
corporate ownership structure, which-by limiting class
members to their common parent- results in a class of less
than forty, namely thirty-nine members. D. 598 at 25-26; D.
598-1 at 66-156 (“Dr. Johnson Report”) ¶ 35;
D. 611 at 25. For one example, Defendants point to a press
release stating that HD Smith, a putative class member,
acquired Valley Wholesale Drug, another putative class
member, in 2012. Dr. Johnson Report ¶ 35 n.48.
Additionally, Defendants argue that the class should also
exclude “five purchasers who have manifested, through
filing individual lawsuits, their intention to opt out of the
proposed class, ” resulting in a direct purchasers
class that is “more appropriately viewed as having 34
members.” D. 598 at 26; D. 611 at 26.
Court rejects Defendants' consolidation of class members
based upon corporate structure. Defendants have provided no
legal support for their argument that class members with
common corporate parents should not be considered distinct
entities for class certification purposes. On the other hand,
DPPs argue that separately incorporated companies are
distinct entities that should be treated as separate class
members to vindicate their own antitrust injuries. D. 631 at
24 (citing Nichols & Co. v. Sec'y of Agric.,
131 F.2d 651, 655 (1st Cir. 1942), vacated on rehr'g
on other grounds, 136 F.2d 503 (1943)). They argue that
here, the putative class members are separately incorporated
companies that each suffered injury. D. 631 at 24. For
example, using one but-for scenario prepared by DPPs'
expert-and the jury will ultimately decide which but-for
scenario is appropriate, as is explained in further detail
below-Valley Wholesale Drug suffered $95, 600 in overcharges
and H.D. Smith Wholesale suffered $15, 147, 800 in
overcharges. D. 632 at 59. Dr. Leitzinger identified putative
class members by using transactional sales data, in which
each member appeared as separate direct purchasers. D. 632
¶ 30. Other courts have held that absent evidence that
the putative class is attempting to inflate the number of
plaintiffs by including corporate subsidiaries,
“subsidiaries should be considered as potential class
members to vindicate their own antitrust injury.”
Am. Sales Co., LLC v. Pfizer, Inc., No. 2:14-cv-361,
2017 U.S. Dist. LEXIS 137222, at *25 (E.D. Va. July 28,
2017). The Court finds this analysis persuasive, particularly
in light of the DPPs' expert's showing of individual
injury sustained by each member of the class. The Court thus
holds that their corporate relationship does not defeat their
status as individual class members here.
Court also declines to adopt Defendants' position that
five purchasers' filing separate complaints compels the
conclusion that they would opt-out of the class, if
certified. Regardless, even if these putative class members
ultimately do opt out of the class, the remaining class of
forty-three would still satisfy the numerosity requirement.
After all, “[n]umerosity is established if the size of
a proposed class, even if inexactly determined, is
sufficiently large as to make joinder impracticable.”
Overka v. Am. Airlines, Inc., 265 F.R.D. 14, 17 (D.
Mass. 2010) (quoting Relafen, 221 F.R.D. at 266)
(internal quotation marks omitted). The size of this class
alone demonstrates that joinder would be impracticable here.
the “subjective” factors in the numerosity
inquiry weigh in favor of certifying the DPP class, showing
that joinder, even if not impossible, is impracticable here,
even where the class includes corporate entities, certain of
which share common corporate parents. Defendants rely upon
In re Modafinil Antitrust Litig., 837 F.3d 238 (3d
Cir. 2016) and King Drug Co. of Florence, Inc. v.
Cephalon, Inc., No. 2:06-cv-1797, 2017 U.S. Dist. LEXIS
137601 (E.D. Pa. Aug. 28, 2017), in support of their argument
that joinder would not be impracticable here. D. 611 at 28;
D. 638. Neither case compels the conclusion Defendants seek.
In Modafinil, the Third Circuit focused on the
impracticability inquiry regarding a putative class
consisting of far less than forty members, stating that under
those circumstances, the inquiry is “particularly
rigorous.” Modafinil, 837 F.3d at 250. In
King Drug, the putative class consisted of only
twenty-two to twenty-four direct purchasers, and the small
class size played a key part of the court's analysis of
the “subjective” impracticability factors.
King Drug, 2017 U.S. Dist. LEXIS 137601, at
have demonstrated that joinder would be impracticable here.
First, geographic dispersion suggests joinder is
impracticable, even when putative class members are corporate
entities. See Lidoderm, 2017 U.S. Dist. LEXIS 24097,
at *72; Am. Sales. Co., 2017 U.S. Dist. LEXIS
137222, at *31; Nexium II, 296 F.R.D. at 52; see
also 5-23 James Wm. Moore et al., Moore's Federal
Practice § 23.22(1)(a) (3d ed. 2017). As DPPs have
shown, putative class members are based throughout the
country. D. 576-1 at 53; D. 632 at 54. Defendants do not
dispute that the proposed class is geographically dispersed.
See D. 611 at 27.
judicial economy and the ability and motivation to litigate
as joined plaintiffs- the two factors of “primary
importance” in Modafinil, 837 F.3d at
253-weigh in favor of class certification here. Here, a class
action serves judicial economy because all putative class
members seek damages stemming from the same allegedly illegal
activity. See Am. Sales Co., 2017 U.S. Dist. LEXIS
137222, at *30; Wilson, 2017 U.S. Dist. LEXIS 572,
at *15; Nexium II, 296 F.R.D. at 53. Even accepting
the Third Circuit's definition of judicial
economy-focused on “the administrative burden that
multiple or aggregate claims place upon the courts, ”
which “primarily involves considerations of docket
control, ” Modafinil, 837 F.3d at 254, 257-the
factor weighs in DPPs' favor due to the difficulty of
coordinating attorneys, scheduling and docketing for
forty-eight clients. See Wilson, 2017 U.S. Dist.
LEXIS 572, at *14-15.
the Court is persuaded that the ability and motivation of
these putative class members to litigate as joined plaintiffs
supports class certification. DPPs argue that Defendants'
assertions that all direct purchasers here would join in a
common suit “ignore the formidable business realities
and legal hurdles standing in the way of such a
strategy.” D. 631 at 26. The competitive relationship
among some class members serves “as a significant
business obstacle” to joinder. D. 631 at 26; see
Am. Sales Co., 2017 U.S. Dist. LEXIS 137222, at *31. To
illustrate this, DPPs conducted an empirical analysis of
approximately 20, 000 federal case filings from the last
fifteen years involving one or more members of this class,
finding that in only five cases- were these members
plaintiffs in pharmaceutical antitrust cases that were not
class actions. DPPs explain that such cases are so
infrequent because the nature of the litigation makes
ascertaining damages difficult at the outset and many cases
mirror this one, where DPPs have demonstrated that
approximately half of the putative class members have
negative value claims. D. 631 at 27; see Lidoderm,
2017 U.S. Dist. LEXIS 24097, at *72; Applegate v. Formed
Fiber Techs., LLC, No. 2:10-cv-00473-GZS, 2012 U.S.
Dist. LEXIS 105264, at *15 n.6 (D. Me. July 27, 2012)
(explaining that the “relatively small size of each
plaintiff's claim would discourage many” putative
class members from pursuing claims individually). Such cases
are the reason why the class action mechanism exists: there
is no incentive for these parties to join in light of the
litigation costs as compared to the damages at stake. See
Amchem Prods. v. Windsor, 521 U.S. 591, 617 (1997).
Court thus finds that the DPPs have met their burden of
proving numerosity under Rule 23(a)(1).
Rule 23(b)(3) Predominance
23(b)(3) requires the Court to find that “the questions
of law or fact common to class members predominate over any
questions affecting only individual members.”
Fed.R.Civ.P. 23(b)(3). The focus of the predominance inquiry is
“whether proposed classes are sufficiently cohesive to
warrant adjudication by representation.”
Amchem, 521 U.S. at 623. When conducting such Rule
23(b)(3) analysis, the Court must determine whether there is
“reason to think that [individualized] questions will
overwhelm common ones and render class certification
inappropriate.” Halliburton Co. v. Erica P. John
Fund, Inc., ___ U.S. ___, 134 S.Ct. 2398, 2412 (2014). A
district court must “formulate some prediction as to
how specific issues will play out in order to determine
whether common or individual issues predominate in a given
case.” Waste Mgmt. Holdings, Inc. v. Mowbray,
208 F.3d 288, 298 (1st Cir. 2000). This may “entail
some overlap with the merits of the plaintiff's
underlying claim, ” Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. 338, 351 (2011), but “Rule 23
grants courts no license to engage in free-ranging merits
inquiries at the certification stage, ” Amgen Inc.
v. Conn. Ret. Plans & Trust Funds, 568 U.S. 455, 466
antitrust actions, “[p]redominance is a test readily
met.” Amchem, 521 U.S. at 625; see
Comcast, 569 U.S. at 41 (Ginsburg, J., dissenting).
Nevertheless, the Court must conduct a thorough analysis of
the facts and expert opinions provided to ensure predominance
has been shown here. See Nexium III, 777 F.3d at 21.
“To meet the predominance requirement, the party
seeking certification must show that ‘the fact of
antitrust impact can be established through common
proof' and that ‘any resulting damages would
likewise be established by sufficiently common
proof.'” Id. at 18 (quoting New Motor
Vehicles, 522 F.3d at 20) (emphasis and alteration in
original). DPPs argue that questions of law and fact
predominate because proof of violation of Section 1 of the
Sherman Act, the unlawful conduct alleged here, will not vary
among class members. D. 575 at 25-26. Defendants do not
dispute, however, that proof of illegal activity will not
vary among class members; they instead argue that individual
questions will overwhelm common ones with respect to common
impact and damages. D. 611 at 11-25. The Court thus takes
each question in turn.
Common Proof of Antitrust Impact
class certification, plaintiffs must only show that
‘antitrust impact is capable of proof at trial through
evidence that is common to the class rather than individual
members.'” Nexium III, 777 F.3d at 24 n.20
(quoting In re Hydrogen Peroxide Antitrust Litig.,
552 F.3d 305, 311 (3d Cir. 2008)).
allege injury in the form of overcharges. D. 575 at 26-27. As
the First Circuit recently reaffirmed, “antitrust
injury occurs the moment the purchaser incurs an
overcharge.” Nexium III, 777 F.3d at 27;
see Hanover Shoe, Inc. v. United Mach. Corp., 392
U.S. 481, 489 (1968). DPPs argue that “were it not for
the unlawful Medicis-Impax Agreement, unimpaired generic
Solodyn competition would have begun in 2009, and all or
nearly all Class members would have paid less for their
requirements of minocycline hydrochloride extended release
tablets by substituting less-expensive generic minocycline
hydrochloride extended release tablets for more-expensive
brand Solodyn.” D. 575 at 27. DPPs allege that they
will be able to provide “mostly or exclusively
common” proof at trial, “including testimony from
Defendants' employees, Defendants' business records,
and expert testimony” to show antitrust impact common
to class members. D. 575 at 24-25.
proffer the opinion of Dr. Jeffrey Leitzinger, an economist
with a career focus on industrial organization, D. 576-1
¶¶ 1-2, to argue common injury or impact among
class members. Dr. Leitzinger concludes that
“Medicis and Impax's allegedly unlawful conduct, if
proven, had a direct, market-wide effect on minocycline
hydrochloride extended release tablet prices generally
(i.e., maintaining prices above the level that would
have occurred absent Medicis and Impax's allegedly
unlawful conduct), ” and that “absent that
conduct and unimpaired generic competition beginning in 2009,
all or nearly all Class members would have paid less for
their purchases of minocycline hydrochloride extended release
tablets.” D. 575 at 27. Dr. Leitzinger bases his
conclusions upon: (1) “extensive empirical economic
research demonstrating that generics are substantially
cheaper than and rapidly substituted for their brand
counterparts, ” D. 575 at 27, including a 2010 FTC
study stating that generics account for ninety percent of the
prescription base one year after entry onto the market; (2)
“contemporaneous forecasting documents, prepared for
business purposes by Medicis, Impax, Teva, Sandoz, Mylan and
Lupin, which conclude that, with unimpaired generic
competition, generic Solodyn would be priced lower than brand
Solodyn, and would quickly capture most Solodyn sales”;
and (3) “what happened during the abbreviated 2009 and
2010 launches of generic Solodyn, and after generic entry
allowed under the challenged agreements, starting November
26, 2011, ” during which times the “[c]lass paid
less for generic Solodyn than for brand Solodyn.” D.
575 at 27-29; D. 576-1 ¶¶ 22-34. Dr. Leitzinger
concludes that given that the putative class members are
“nearly all wholesalers or retailers supplying product
to broad cross-sections of the patient community, ” and
that approximately ninety percent of Solodyn prescriptions
would have converted to generics under competitive conditions
at a fraction of the branded price, “if the jury
concludes there was meaningful impairment of generic
competition” here, “the only plausible inference
is that all (or nearly all) Class members paid inflated
prices for (at least some of) their minocycline hydrochloride
extended release tablets as compared to what they would have
paid” otherwise. D. 576-1 ¶¶ 35-38.
argue that DPPs' evidence is insufficient to establish
predominance because it is “generalized” and does
not show actual injury of any members of the class. D. 598 at
12-14; D. 611 at 12-14. Defendants distinguish this case from
other reverse payment cases where academic literature and
forecasts provided the appropriate evidence because here,
unusually, there was at least some time during the class
period during which generics were on the market. D. 598 at
12-14. They argue that actual data showing prices and sales
of those generics and brand Solodyn during that time is thus
the better measure of whether the class members suffered any
antitrust injury. Id. To support their arguments,
Defendants submit the opinion of John H. Johnson, IV, the
President and CEO of Edgeworth Economics LLC, a consulting
firm that provides “economic and financial analysis for
complex litigation and public policy debates.” Dr.
Johnson Report ¶ 5. Dr. Johnson argues “there was
no actual delay in generic entry” in this case
because generic Legacy Strength Solodyn was introduced
through three at-risk entries and, “as a result, was
continuously available to consumers throughout the class
period.” Dr. Johnson Report ¶ 1 (emphasis in
argument serves as the basis for several attacks on Dr.
Leitzinger's-and DPPs'- contentions. First,
Defendants argue that Dr. Leitzinger's methodology is
flawed because it ignores actual data about purchasers'
rate of conversion to generic Solodyn during this period in
favor of inaccurate forecasts and generalized economic
literature. D. 598 at 13; D. 611 at 13. Second, Defendants
argue that Dr. Leitzinger's conclusions depend upon a
hypothetical world in which putative class members purchased
more generic Solodyn than they actually did without providing
a methodology showing that to be true. D. 598 at 16-17; D.
611 at 16-17. Third, Defendants argue that Dr.
Leitzinger's report fails to account for
“case-specific supply and demand factors” such as
Medicis marketing and promotion programs (e.g., coupon
programs) that made the brand less expensive than the generic
for many patients and Medicis's launch of the Solodyn
Add-On Strengths. D. 598 at 17-18; D. 611 at 17-18.
Defendants argue that these factors, and not restricted
competition resulting from the Medicis-Impax agreement,
explain the low demand of generic Solodyn during that time.
D. 598 at 17-18.
Leitzinger responds by explaining that the “actual
data” here is not “representative of what would
have occurred in the but-for world” of unrestrained
competition. D. 576-1 ¶ 44. He explains that he was
“not able to make use of the actual generic experience
for purposes of estimating generic penetration in the but-for
world” because the “initial abbreviated Legacy
Strength generic launches were limited to just a few days and
therefore do not provide a meaningful window as to the likely
generic penetration from a sustained generic presence in the
market, ” and the “post-November 2011 launches
occurred at a time when Medicis was no longer selling Solodyn
in Legacy Strengths.” Id. DPPs argue that the
relevant comparison is not what happened in the actual world
with brief generic launches, but rather the conversion rate
and price assuming “sustained, full-fledged generic
competition.” See D. 631 at 11. With that
understanding in mind, DPPs argue that all or nearly all
class members paid overcharges on their purchases and thus
experienced antitrust impact. D. 631 at 21.
predictive evidence and methodologies often serve as the
basis for a showing of predominance in antitrust cases.
See, e.g., Lidoderm, 2017 U.S. Dist. LEXIS
24097, at *61 (accepting DPPs' arguments for classwide
proof of injury “[g]iven the well-researched market at
issue and the well-recognized type of antitrust injury
alleged”); Relafen, 218 F.R.D. at 343-45. The
Court declines to reject DPPs' reliance, at least in
part, upon forecasts or predictions, even here, where there
was some data regarding the impact of generics on the market,
because the limits of the latter data do not serve as an
appropriate proxy for the but-for market.
the Court is persuaded that these forecasts serve as a better
proxy for unconstrained competition than the
“actual” data of generic and brand Solodyn sales.
First, DPPs argue that the brief generic entry during 2009
and 2010 did not establish unfettered competition between
generics and brand Solodyn. D. 631 at 14-15. Dr. Leitzinger
points out that each generic seller separately entered the
market for only a few days in each case before entering into
agreements with Medicis, at which point they each announced
that they were leaving the market. D. 632 ¶ 10. At the
start of each brief launch there was “rapid growth in
retail prescriptions filled by generics, ” but after
each generic seller announced it would be ending sales,
“the growth in generic prescription levels halted,
turning sharply downward.” D. 632 ¶¶ 11-12.
Dr. Leitzinger also presents evidence that generic Solodyn
was not accessible by many direct purchasers or registered on
large health insurers' formularies until after the
generics' sustained launch in 2011. D. 632 ¶¶
15-17. Second, Dr. Leitzinger explains that Medicis's
couponing during this period does not account for differences
between actual sales and forecasted sales of generics during
this time because, among other things, “the primary
process which drives generic penetration is automatic
substitution at the pharmacy level, ” which is not
impacted by any coupon or copay programs for
consumers. D. 632 ¶ 24. Third, DPPs argue that
post-2011 generic sales are not a valid proxy because by
November 2011, Medicis had taken “advantage of the
generic delay it had purchased to shift the majority of
Solodyn prescriptions from the Legacy to the Add-On
Strengths.” D. 631 at 15-16. Additionally, Dr.
Leitzinger did take the actual data into account in forming
his conclusions, noting that even during the points of
limited entry, the generic was priced at approximately fifty