Hagens Berman has filed an antitrust lawsuit against pharmaceutical manufacturer Warner Chilcott (NASDAQ: WCRX), alleging the company used anti-competitive tactics, including lying to the U.S. Patent Office, to suppress generic competition for oral contraceptive drug Loestrin 24 Fe (also known simply as “Loestrin 24”).
According to the consolidated amended complaint, filed on December 6, 2013 in the U.S. District Court for the District of Rhode Island, Warner Chilcott has used a number of illegal tactics to prevent the emergence of generic, and cheaper, competitors to Loestrin, the blockbuster birth control pill the company invented in the 1970s.
First, the complaint claims that the “new” drug, named Loestrin 24, was not different enough from the older versions to justify a new patent. However, thanks to a misleading application that failed to identify key evidence, Loestrin 24 was patented in 1996. The FDA later confirmed that Loestrin 24 did not do what the patent claimed: reduce the incidence of breakthrough bleeding associated with low dose birth control pills.
The complaint goes on to describe that generic manufactures—aware that it was unlikely that the dubious patent would stand up to litigation—began to submit applications to the FDA for approval to sell generic versions of Loestrin 24 before the patent had expired.
HBSS alleges that Warner Chilcott responded with an even more audacious gambit: suing its would-be generic drug manufacturer competitors for breaching the questionable patent, and later conspiring with its would-be competitors to enter into anticompetitive “settlement” agreements that would keep generics off the market in exchange for a cut of Warner Chilcott’s profits.
The complaint also claims that Warner Chilcott’s filing of these lawsuits triggered an automatic 30-month stay against any potential generic competitors receiving FDA approval, a procedural tactic that further enforced its alleged illegal monopoly.
On September 4, 2014 Judge Smith dismissed the direct purchaser claims in their entirety because he erroneously interpreted the Supreme Court’s decision in FTC v. Actavis as requiring a cash payment from the brand to the generic in order to trigger antitrust scrutiny. The claims are now up before the First Circuit. Appellants’ brief is due May 19, 2015.
HBSS has been appointed co-lead counsel for the “direct purchaser class,” defined as all persons or entities in the United States and its territories who purchased Loestrin 24 directly from Warner Chilcott at any time during the period May 14, 2009, through and until the anti-competitive effects of the defendants’ conduct cease (the “Class Period”).
Those interested in more information on the case may contact an attorney at [email protected] or by calling (617) 482-3700.
CASE TIMELINE
Hagens Berman settled this class action regarding Loestrin for $120 million on behalf of a class of direct purchaser plaintiffs. As co-lead counsel, the firm’s team inked a memorandum of understanding agreement in December 2019, only weeks before trial. The settlement was preliminarily approved in 2020, and since, the settlement has been finalized and funds have been disbursed.
On Aug. 8, 2017, the court denied the defendants’ motion to dismiss the direct purchaser plaintiffs’ complaint, allowing the direct purchasers’ sham litigation, patent fraud, product hop, and reverse payment claims to continue. The court dismissed claims against the parent companies Allergan and Actavis. Discovery is ongoing. The court has set a trial date for March 2019. For more details, read Judge William E. Smith’s orders:
The district court has set a status conference for Apr. 21, 2016.
The district court earlier held that it was legal for brand companies to pay generics to stay off the market as long as the payment didn’t take the form of cash, and dismissed the purchasers’ case. On Feb. 22, 2016, the First Circuit said “applesauce” (to quote Justice Scalia) and reversed the decision. The First Circuit joined the Third Circuit in recognizing that a payment is a payment is a payment, noting that restricting Actavis to cash-only payments would contradict Actavis. The Court also noted that it would improperly, “give drug manufacturers carte blanche to negotiate anticompetitive settlements so long as they involve non-cash reverse payments.”
Appellate briefing schedule issued.
The Court issued an order on defendants’ motions to dismiss.
The Court held oral argument on defendants’ motions to dismiss.
Direct purchasers opposed defendant’s motion to dismiss.
Hagens Berman was named interim co-lead counsel for a proposed class of direct purchasers in the case.
