United States District Court, D. Massachusetts
In re LANTUS DIRECT PURCHASER ANTITRUST LITIGATION
MEMORANDUM OF DECISION AND ORDER ON DEFENDANT'S
MOTION TO DISMISS
Gail Dein United States Magistrate Judge
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.
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.
STATEMENT OF FACTS
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,
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.
to this litigation, Sanofi is also the holder of other
“formulation” patents covering preparations of
insulin,  and “pen” patents covering
injector pens or components thereof. 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.
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.
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.
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.
Drug Applications and Patent Listing Requirements
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.
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.
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.
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.
Book Listings Requirement
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
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
(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).
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.” 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
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.
Products and Patents
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.
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.
SoloSTAR and the ...