United States District Court, D. Massachusetts
In re INTUNIV ANTITRUST LITIGATION Direct Purchasers
MEMORANDUM AND ORDER ON MOTION FOR CLASS
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE.
“pay-for-delay” or “reverse
settlement” case concerns an allegedly anticompetitive
settlement of patent litigation related to the ADHD drug
Intuniv. Direct purchaser plaintiffs Rochester Drug
Co-Operative, Inc. (“RDC”) and FWK Holdings LLC
(“FWK”) (together, the “DPPs”) bring
antitrust claims on behalf of a putative class comprised of
entities that purchased Intuniv (the brand name for extended
release guanfacine hydrochloride) from brand Intuniv
manufacturer Shire LLC and Shire U.S., Inc. (collectively,
“Shire”) or generic Intuniv manufacturer Actavis
Elizabeth LLC, Actavis Holdco US, Inc., and Actavis LLC
(collectively, “Actavis” and together with Shire,
“Defendants”). The DPPs allege that Defendants
improperly delayed competition for both brand Intuniv and
generic Intuniv in violation of Sections 1 and 2 of the
Sherman Act, 15 U.S.C. §§ 1–2, causing the
DPPs to pay an inflated price for Intuniv. See
generally [ECF No. 140 (“Consolidated Amended
Complaint” or “CAC”)].
the Court is the DPPs’ motion for class certification
[ECF No. 198]. For the reasons explained herein, the motion
is GRANTED in part and DENIED in part.
allegations at issue here are set out more fully in the
Court’s October 10, 2017 Memorandum and Order on
Defendants’ motion to dismiss. [ECF No. 92-1 at
2–8]. The Court therefore reviews only the facts
relevant to class certification.
Patent Litigation and Anticompetitive Settlement
manufactures and sells Intuniv, which is generally prescribed
to treat ADHD. [CAC ¶¶ 21–22]. On September
2, 2009, the Food and Drug Administration (“FDA”)
approved Shire’s New Drug Application
(“NDA”) for Intuniv pursuant to 21 U.S.C. §
355. [Id. ¶ 98]. During the relevant time
period, Shire held three patents that covered Intuniv
(collectively, the “Intuniv Patents”).
[Id. ¶¶ 99–101]. Under the Drug
Price Competition and Patent Term Restoration Act of 1984,
Pub. L. No. 98–417, 98 Stat. 1585, commonly known as
the Hatch-Waxman Act, a generic manufacturer may file an
Abbreviated New Drug Application (“ANDA”) to seek
approval of a proposed generic version of a brand drug.
See 21 U.S.C. § 355(j). Obtaining approval for
an ANDA is easier than obtaining approval for an NDA. See
In re Loestrin 24 Fe Antitrust Litig., 814 F.3d 538, 543
(1st Cir. 2016). In filing an ANDA to obtain approval for a
generic drug, a generic manufacturer must certify that the
generic does not infringe any of the patents that the brand
company lists as covering the drug at issue. See 21
U.S.C. § 355(j)(2)(A)(vii). On December 29, 2009,
Actavis became the first company to file an ANDA for a
generic version of Intuniv. [CAC ¶ 8].
certification that Actavis filed with its ANDA constituted a
constructive act of infringement, granting Shire standing to
sue Actavis. See 35 U.S.C. § 271(e)(2)(A);
In re Loestrin 24 Fe, 814 F.3d at 543. Shire
subsequently filed suit pursuant to 21 U.S.C. §
355(j)(5)(B)(iii), which triggered an automatic 30-month stay
of any FDA approval of ANDAs for generic Intuniv. [CAC ¶
10]; see In re Loestrin 24 Fe, 814 F.3d at 543. As
the first filer of an ANDA, Actavis was entitled to “a
180-day period of exclusivity during which ‘no other
generic can compete with the brand-name drug.’”
In re Loestrin 24 Fe, 814 F.3d at 543 (quoting
FTC v. Actavis, 570 U.S. 136, 144 (2013));
see 21 U.S.C. § 355(j). A critical exception to
that exclusivity is that the brand company can itself market
an “authorized generic” during this 180-day,
first-filer exclusivity period. See Sanofi-Aventis v.
Apotex Inc., 659 F.3d 1171, 1175 (Fed. Cir. 2011).
Shortly after Actavis filed its ANDA, several other companies
including TWi Phamaceuticals, Inc. and Anchen
Pharmaceuticals, Inc. (together, “Twi/Anchen”)
filed their own ANDAs. [CAC ¶ 9]. Shire initiated patent
infringement litigations against each ANDA filer.
[Id. ¶ 10].
DPPs allege that Shire engineered a settlement with
Twi/Anchen that would have allowed Twi/Anchen to release an
authorized generic Intuniv under certain conditions.
[Id. ¶ 11]. That settlement threatened Actavis
with the prospect of competition during its valuable 180-day
exclusivity period, which Actavis was eager to avoid. Shortly
after the conclusion of a bench trial on Shire’s claims
against Actavis, the 30-month stay on Actavis’ ANDA
expired on October 5, 2012, and the FDA approved the
application on the same day. [Id. ¶¶
120–21, 139– 40].
DPPs argue that, at the conclusion of the bench trial on
Shire’s patent claims in 2012, a ruling in
Actavis’ favor appeared likely. [Id.
¶¶ 120–21]. Success on those claims would
not, however, have guaranteed Actavis complete exclusivity
from competition for its generic Intuniv during its 180-day
exclusivity period given Shire’s own apparent plans for
an authorized generic. See [id. ¶
141]. On April 25, 2013, before any judgment or opinion had
entered on the patent claims, Shire and Actavis entered into
a settlement agreement. [Id. ¶ 141]. The DPPs
claim that despite illusory terms in the settlement agreement
that technically permitted Shire to launch an authorized
generic directly or through an affiliate, the agreement was a
thinly disguised reverse payment agreement. [Id.
¶¶ 91, 152]. According to the DPPs, Shire
effectively guaranteed Actavis a full 180-day exclusivity
period during which it would face no authorized generic
competition. [Id. ¶¶ 148–49]. In
exchange, Actavis agreed to delay its launch of generic
Intuniv until December 1, 2014, thereby allowing Shire to
enjoy monopoly profits for brand Intuniv in the interim.
[Id. ¶¶ 149, 152]. The DPPs argue that
this anticompetitive settlement agreement caused them to pay
artificially inflated prices for both brand and generic
Intuniv. See [id. ¶¶
filed this case on December 30, 2016. [ECF No. 1]. On January
11, 2017, RDC filed similar claims, and on March 1, 2017, the
Court granted a joint motion to consolidate the two actions.
[ECF No. 19]. RDC is a regional distributor of
pharmaceuticals and FWK holds, by assignment, the antitrust
claims of Frank W. Kerr Co., a former pharmaceutical
wholesaler that entered bankruptcy and subsequently closed.
consolidated action has proceeded in coordination with claims
brought on behalf of a putative class of indirect purchasers
of Intuniv. See Picone v. Shire U.S. Inc. (Indirect
Purchaser Antitrust Class Action), No.
16-cv-12396-ADB (D. Mass). On November 1, 2018, the DPPs filed the
instant motion to certify the following class:
All persons or entities in the United States and its
territories, or subsets thereof, that purchased Intuniv
and/or generic Intuniv in any form directly from Shire or
Actavis, including any predecessor or successor of Shire or
Actavis, from October 19, 2012 through June 1, 2015 (the
[ECF No. 198 at 1]. Excluded from the putative class are
Shire, Actavis, their officers, directors, management,
employees, subsidiaries, and affiliates, as well as
governmental entities. [Id. at 1– 2].
Defendants filed their opposition to class certification on
February 12, 2019; the DPPs filed a reply on March 21, 2019;
the Defendants filed a sur-reply on April 1, 2019; and the
DPPs filed a final brief on April 8, 2019. [ECF Nos. 224,
234, 244, 252]. The parties’ combined briefing runs 122
pages of text with 644 footnotes in undersized font and is
supported by more than 2, 000 pages of exhibits.
Expert Reports and Class Injury
DPPs have proffered an expert declaration from Jeffrey J.
Leitzinger, Ph.D. Dr. Leitzinger opines that “there is
evidence common to members of the Class which shows, with
high likelihood, that all members of the class paid at least
some overcharge and therefore suffered antitrust
injury.” [ECF No. 199-1, “Leitzinger Decl.,
” ¶ 23]. He notes that both the economic
literature and documents reflecting the relevant
companies’ pricing expectations indicate that earlier
entry of generic Intuniv and earlier robust generic
competition would have resulted in class members paying less
for Intuniv. [Id. ¶¶ 29–32].
Additionally, the observable market prices after entry of
Actavis’ generic Intuniv in December 2014 and the entry
of four additional generics in June 2015 show that direct
purchasers were able to obtain generic Intuniv at
considerably less than the brand Intuniv price. [Id.
¶ 33]. By making certain assumptions about the degree
and timing of the additional generic competition that might
have been present in the marketplace absent Defendants’
allegedly anticompetitive conduct, Dr. Leitzinger is able to
posit a range of aggregate class overcharges that the class
suffered as a result of Defendants’ conduct.
[Id. Exs. 8a, 8b].
proffer a counter-declaration from their expert, Gregory K.
Bell, Ph.D., who disagrees with Dr. Leitzinger. He opines
that the putative class members operate under different
business models and that FWK and RDC do not exhibit common
behaviors or share common circumstances with many of the
absent putative class members whom they seek to represent.
[ECF No. 223-55, “Bell Decl., ” ¶¶
7–8]. As Dr. Bell notes, the putative class contains
thirty wholesalers and distributors like RDC, including the
“Big 3” wholesalers (AmerisourceBergen
Corporation, Cardinal Health, and McKesson Corporation) who
were responsible for approximately 90% of the direct
purchases of Intuniv during the class period, twelve
self-warehousing retail pharmacies like Walmart, five
mail-order pharmacies owned by pharmacy benefit managers, and
one pharmacy owned by an integrated health maintenance
organization. [Id. ¶¶ 11, 47–61].
Dr. Bell states that individualized inquiries would be
required to determine whether particular putative class
members experienced any impact as a result of the alleged
anticompetitive agreement given differences in the class
members’ business practices. He further asserts that at
least one class member did not suffer any impact from the
conduct at issue and that eight putative class members have
negative damages in at least one of the four scenarios
proffered by Dr. Leitzinger. [Id. ¶¶
7–9; see Leitzinger Decl. Ex. 7].
Leitzinger responds to Dr. Bell’s assertion that
several class members were uninjured by arguing that Dr. Bell
projects “negative overcharges” for some class
members only by engaging in an apples-to-oranges comparison.
[ECF No. 234-2, “Leitzinger Rebuttal Decl., ”
¶¶ 17–27]. Dr. Leitzinger contends that Dr.
Bell’s analysis relies on the faulty assumption that
because some class members paid less than the projected
average expected price for Intuniv without Defendants’
anticompetitive conduct, those class members would not have
been able to pay even less but-for the illegal behavior.
[Id. ¶ 20–24]. The experts also disagree
about certain modeling methods and which, if any, class
members would have purchased generic Intuniv absent
Defendants’ conduct even though they did not actually
purchase generic Intuniv when it became available.
See [id. ¶¶ 25, 27–40].