In September 2019, the U.S. District Court for the Southern District of New York (“SDNY”) denied Takeda Pharmaceutical Company Ltd.’s (“Takeda”) motion to dismiss a lawsuit brought by the United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund (“Plaintiffs”). The lawsuit, filed as an end-payor class action in 2013, alleges that Takeda and its corporate entities engaged in monopolistic behavior to delay the production of a generic form of the insulin drug, Actos, thereby forcing consumers to buy Takeda’s more expensive, name-brand version.
Plaintiffs in the case are represented by Shepherd, Finkelman, Miller & Shah LLP as co-lead counsel.
Plaintiffs allege that Takeda submitted false and misleading patent information, claiming that its patents covered the Actos ingredients, instead of the methods for using the drug. Those misrepresentations created a bottleneck on FDA approval of any generic versions of Actos by forcing generic drug manufacturers into an approval process whereby the first-filed manufactures were granted 180-day market exclusivity, with subsequent filers being unable to obtain approval until the expiration of that exclusivity period. Takeda then settled pending patent infringement litigation with the first-filed generic manufacturers until August 2012, and settled with the later-filing generic manufacturers on terms that kept them off the market until February 2013. Accordingly, Plaintiffs seek compensation for the approximate one-year period in which they allege they were forced to pay the higher price of the name brand drug instead of the generic version.
Plaintiffs’ initial complaint was dismissed in 2015 when the SDNY held that its allegations did not meet the threshold of cognizable, anticompetitive conduct. Upon appeal in 2017, the Second Circuit Court of Appeals (“Second Circuit”) partially vacated the District Court’s decision, opining that Plaintiffs failed to adequately allege that any falsity in description of patents was cause of delay in generic drugs entering the market due to exclusivity period granted to first-to-file generic manufacturers. However, the Second Circuit also explained that Plaintiffs sufficiently alleged that “market delay for generic drug manufacturers that would not have been subject to any exclusivity period for generics was caused by alleged falsity, as required to state monopolization claims under state antitrust laws.” Consequently, the case was remanded to the SDNY.
In rejecting Takeda’s motion to dismiss, the SDNY found that Takeda had failed to demonstrate that Plaintiffs were required to plead bad faith, and that Plaintiffs had sufficiently alleged that Takeda’s statements made to the FDA could be deemed anticompetitive. The parties will now move to begin the discovery process.
Updates to this blog will be provided as discovery unfolds.
The legal team at Shepherd, Finkelman, Miller & Shah, LLP (“SFMS”) has significant experience litigating class action and employment matters. Please contact John Roberts (firstname.lastname@example.org) if you have a similar matter to discuss. We can also be reached toll-free at 877-891-9880.
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