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In re Lantus Direct Purchaser Antitrust Litigation

United States District Court, D. Massachusetts

January 10, 2018



          Judith Gail Dein United States Magistrate Judge


         Plaintiffs, FWK Holdings, LLC and Cesar Castillo, Inc., are purchasers of the insulin glargine products Lantus and Lantus SoloSTAR, which are used in the treatment of Type I and Type II diabetes. They have brought a purported class action on behalf of themselves and all others similarly situated against Sanofi-Aventis U.S. LLC (“Sanofi”), the manufacturer of both products, alleging that Sanofi improperly delayed the entry into the market of a competitive product manufactured by Eli Lilly and Company (“Lilly”). In their Amended Class Action Complaint, plaintiffs assert two claims under Section 2 of the Sherman Act (15 U.S.C. § 2) - one for monopolization and one for attempted monopolization. It is the plaintiffs' contention that Sanofi prolonged its monopoly for insulin glargine by (1) improperly listing six patents in the U.S. Federal Drug Administration's Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”) and (2) pursuing sham litigation against Lilly in which Sanofi asserted claims of patent infringement, allegedly without any basis. The litigation was settled by Sanofi and Lilly shortly before trial.

         This matter is before the court on “Defendant Sanofi-Aventis U.S. LLC's Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6)” (Docket No. 21). Sanofi argues that the court should dismiss both counts of the Amended Complaint (Docket No. 10) (“Am. Compl.”) pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. This court finds that the plaintiffs have failed to allege sufficient facts to support a finding of antitrust liability against Sanofi for listing patents in the Orange Book unreasonably, or for engaging in sham litigation with Lilly. Therefore, and for the reasons detailed herein, Sanofi's Motion is ALLOWED and the Amended Complaint is dismissed without prejudice.



         Sanofi is a life sciences company that sells, among other medicines, Lantus - an insulin glargine solution used for Type I and Type II diabetes. Am. Compl. ¶ 3; Def. Mem. (Docket No. 22) at 1. Lantus is sold in vial form or in an injector pen formulation known as Lantus SoloSTAR. Am. Compl. ¶ 3. Sanofi gained approval from the FDA to sell Lantus in vial form in 2000 and to sell Lantus SoloSTAR in 2007. Id. ¶¶ 3, 127. According to the plaintiffs, the original patent for insulin glargine, U.S. Patent No. 5, 656, 722 (“the ‘722 patent”), as extended by a period of pediatric exclusivity, [1] expired on February 12, 2015. Id. ¶¶ 103, 105. The plaintiffs contend that “[t]his lawsuit does not challenge Sanofi's right to charge supra-competitive prices for Lantus products up until February of 2015. But it does challenge Sanofi's unlawful conduct in prolonging its exclusive position beyond February of 2015, i.e., beyond the expiration of the ‘722 patent.” Id. ¶ 121.

         Relevant to this litigation, Sanofi is also the holder of other “formulation” patents covering preparations of insulin, [2] and “pen” patents covering injector pens or components thereof.[3] Id. ¶¶ 131-32, 161-66, 221. Sanofi listed these patents in the FDA's Orange Book which, as described below, is intended to put other drug manufacturers on notice of relevant patents, and can trigger a patent-holder's right to bar the entry of a competitor's product into the market while patent infringement claims are resolved. See, e.g., id. ¶ 296. While the plaintiffs contend that Sanofi's listing of six of these patents in the Orange Book was wrongful, and were part of a scheme “to maintain and extend its monopoly power with respect to insulin glargine products - sold under the brand names Lantus and Lantus SoloSTAR, ” id. ¶ 297, Sanofi has focused its motion to dismiss on one of the “pen” patents, the ‘864 patent. If Sanofi prevails with respect to its treatment of the ‘864 patent, the entire complaint must be dismissed as the plaintiffs would not be able to establish any damages in connection with any of the other patents. For all the reasons detailed herein, this court concludes that the plaintiffs have failed to sufficiently allege a claim that the ‘864 patent was improperly listed in the Orange Book.

         In 2013, Lilly sought FDA approval for its own insulin-glargine product called Basaglar. Id. ¶¶ 4, 187-88. Lilly wanted to sell Basaglar on the U.S. market once the ‘722 patent had expired in February 2015. Id. ¶ 4. As is required by the FDA, Lilly notified Sanofi regarding the relationship between Basaglar and all of Sanofi's patents listed in the Orange Book for Lantus and Lantus SoloSTAR. Id. ¶ 191. With the exception of the ‘722 patent that Lilly was waiting to expire, Lilly notified Sanofi of its position that Sanofi's patents “were invalid, unenforceable, and/or would not be infringed by the commercial manufacture, use, or sale of the Lilly . . . product.” Id.

         Sanofi sued Lilly for patent infringement on two of the vial formulation patents and two of the injector pen patents, including the ‘864 patent. Id. ¶ 205. Suit was brought within the statutorily mandated period of 45 days from receipt of Lilly's notice, thereby triggering an automatic stay of FDA approval of Basaglar for 30 months or until suit was resolved, whichever was sooner. Id. ¶ 206. The plaintiffs contend that this was “sham” litigation, and was brought without any basis and for the sole purpose of extending Sanofi's exclusive period. See, e.g., id. ¶¶ 224-34. As detailed below, this court concludes that the plaintiffs have failed to allege sufficient facts to support that conclusion.

         Sanofi and Lilly engaged in extensive pre-trial litigation. See id. ¶ 238. On September 28, 2015, the morning of trial, Lilly and Sanofi settled the litigation. Id. ¶ 241. The settlement included an agreement that Sanofi would grant Lilly a royalty-bearing license so that Lilly could manufacture and sell Basaglar in a KwikPen device globally, and an agreement that Lilly would delay launching Basaglar in the United States until December 15, 2016, even if it obtained final FDA approval before then. Id. ¶¶ 241-43. Plaintiffs have defined the class period in this litigation as February 13, 2015, when the ‘722 patent expired, through December 31, 2016, directly after when Lilly was able to sell Basaglar. Id. ¶ 284. Plaintiffs assert that they would have purchased Basaglar instead of Sanofi's products had it been available earlier, but, instead, were forced to buy Lantus and Lantus SoloSTAR products at arbitrarily-inflated prices. Id. ¶¶ 11-12, 250-59.

         Regulatory Background[4]

         New Drug Applications and Patent Listing Requirements

         Drug manufacturers, including Sanofi and Lilly, must gain FDA approval before selling a drug in the United States. The requirements for doing so are listed in the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301 et seq. (“FDCA”). Am. Compl. ¶ 27. Of relevance to the instant litigation, in connection with their applications for their insulin glargine products, Sanofi and Lilly were required to follow the processes for the approval of new drugs governed by § 505 of the FDCA (“§ 505”), which is codified at 21 U.S.C. § 355. Id. ¶ 28.

         Applicants wishing to manufacture and sell a new drug must file a New Drug Application (an “NDA”) under § 505(b)(1). Id. ¶ 29. The law mandates that an NDA applicant must submit scientific data demonstrating that a drug is safe and effective, as well as “the patent number and the expiration date of any patent which claims the drug for which the applicant submitted the application or which claims a method of using such drug and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug.” § 505(b)(1); Am. Compl. ¶ 29. Within 30 days of FDA approval of an NDA, or amendments or supplements thereto, or if the applicant obtains a new patent relating to the approved product, the applicant must provide the FDA with information regarding each patent that claims the “drug substance, ” “drug product, ” or “approved method of use” that falls within the statutorily defined listing requirements. See 21 C.F.R. § 314.53(b)(1); 21 U.S.C. §§ 355(b)(1) & (c)(2); see also Am. Compl. ¶¶ 43-45. The FDA publishes this information in the Orange Book, “so that competitors understand the scope of the brand's ostensible patent protection.” See 21 U.S.C. § 355(c)(2); see also Am. Compl. ¶ 23.

         In 1984, Congress enacted the Drug Price Competition and Patent Term Restoration Act, Pub. L. No. 98-417, 98 Stat. 1585 (1984), which amended the FDCA and whose provisions are known as the Hatch-Waxman Amendments. Am. Compl. ¶ 32. The Hatch-Waxman Amendments allowed for lower cost alternative brand products to come to market. Id. Under § 505(b)(2), as amended by the Hatch-Waxman Amendments, a brand company can file an NDA relying on data developed not by the applicant, but by a company with an already approved and sufficiently similar product. Id. ¶¶ 37, 38. In doing so, the applicant must certify the relationship between its product and the existing patents listed in the Orange Book on which the applicant is relying. § 505(b)(2); Am. Compl. ¶ 58. Specifically, § 505(b)(2) requires that when investigations relied on in the NDA “were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted . . . [, ]” an applicant can certify to either of four options: “(i) that such patent information has not been filed, (ii) that such patent has expired, (iii) of the date on which such patent will expire, or (iv) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted . . . .” 21 U.S.C. § 355 (b)(2)(A)(i-iv); see Am. Com. ¶ 58.

         When a company files an NDA with a certification under §505(b)(2)'s option IV (a “Paragraph IV Certification”) claiming that the product will not infringe a patent or that the relevant patent is invalid, the patent statute treats the certification itself as a technical act of infringement. See 35 U.S.C. § 271(e)(2)(A). This allows the original company that listed the patent a chance to sue. If the patent holder sues the NDA applicant within 45 days of receiving the Paragraph IV Certification, the approval of the NDA is automatically stayed for 30 months, or until the litigation is resolved, whichever is sooner. See 21 U.S.C. §355(c)(3)(C).

         Orange Book Listings Requirement

         As noted above, 21 C.F.R. § 314.53 (b)(1) dictates which patents applicants must list in the Orange Book when filing an NDA. The regulation provides that applicants should list “patent[s] that claim[] the drug or a method of using the drug . . . [which] consist of drug substance (active ingredient) patents, drug product (formulation and composition) patents, and method-of-use patents.” Section 314.53 also identifies those patents applicants should exclude, explaining that “[p]rocess patents [and] patents claiming packaging . . . are not covered by this section, and information on these patents must not be submitted to FDA.” (Emphasis added).

         In 2003, the FDA revised the regulations implementing certain statutory provisions included in the Hatch-Waxman Amendments. During the notice and comment period of the rulemaking process for those regulations, the FDA received various comments (hereinafter “Comments”) regarding the proposed rule 21 C.F.R. § 314.53, which it summarized as follows:

(Comment 3) Most comments agreed that patents claiming packaging should not be submitted for listing. However, some comments stated that patents claiming devices or containers that are “integral” to the drug product or require prior FDA approval should be submitted and listed. These comments distinguished between packaging and devices such as metered dose inhalers and transdermal patches, which are drug delivery systems used and approved in combination with a drug.

Applications for FDA Approval to Market a New Drug: Patent Submission and Listing Requirements and Application of 30-Month Stays on Approval of Abbreviated New Drug Applications Certifying That a Patent Claiming a New Drug is Invalid or Will Not Be Infringed, 68 Fed. Reg. 36676-01, 2003 WL 21391636, at 36, 680 (June 18, 2003).

         The FDA provided a response to the Comments with the final rule, noting that the agency had “clarified the rule to ensure that if the patent claims the drug product as defined in § 314.3, the patent must be submitted for listing.”[5] Id. The FDA's response was as follows (hereinafter “FDA Response”):

(Response) We agree that patents claiming a package or container must not be submitted. Such packaging and containers are distinct from the drug product and thus fall outside of the requirements for patent submission. However, we have clarified the rule to ensure that if the patent claims the drug product as defined in § 314.3, the patent must be submitted for listing.
Section 314.3 defines a “drug product” as “*** a finished dosage form, for example, tablet, capsule, or solution, that contains a drug substance, generally, but not necessarily, in association with one or more other ingredients.” The appendix in the Orange Book lists current dosage forms for approved drug products. The list includes metered aerosols, capsules, metered sprays, gels, and pre-filled drug delivery systems. The key factor is whether the patent being submitted claims the finished dosage form of the approved drug product. Patents must not be submitted for bottles or containers and other packaging, as these are not “dosage forms.”

Id. (emphasis added). At issue in connection with this motion to dismiss is whether Sanofi appropriately listed the ‘864 patent in the Orange Book. In particular, the plaintiffs contend that the ‘864 patent is just packaging and does not “claim[ ] the finished dosage form of the approved drug product.” Sanofi contends that the ‘864 patent was appropriately listed as a pre-filled drug delivery system.

         Sanofi's Products and Patents


         Sanofi is the holder of the original patent for insulin glargine, the ‘722 patent. Am. Compl. ¶ 103. Insulin glargine is a long-acting analog insulin for management of diabetes. Id. ¶ 3. The ‘722 patent expired in August 2014 with a period of pediatric exclusivity extending to February 2015. Id. ¶105. Sanofi listed the ‘722 Patent in the Orange Book. Id. ¶ 107.

         On or around April 20, 2000, the FDA approved NDA No. 21-081 for Lantus, a sterile solution of insulin glargine for use as an injection and sold throughout the United States. Id. ¶¶ 3, 106, 108. As originally approved, Lantus “had two package forms: (1) vials (5 and 10 mL) for use with single-dose syringes, and (2) cartridges (3 mL) for use in an injector pen Sanofi called ‘OptiPen™ One.'” Id. ¶ 110. Over the years, Sanofi obtained two additional “formulation” patents relating to the ingredients in the Lantus vial formulation. Id. ¶¶ 123, 126, 131-32. These were also listed in the Orange Book. Id. ¶ 154. Plaintiffs contend that these patents were improperly listed. Id. ¶¶ 155-58. However, since they are not the basis for Sanofi's motion to dismiss, they will not be discussed further herein.

         Lantus SoloSTAR and the ...

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