Judge Issues Final Approval for $9M Skelaxin Antitrust Settlement

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Last Tuesday, a judge issued his final approval endorsing a $9 million agreement reached between Mutual Pharmaceutical Co. Inc. and an end-payor class. The settlement resolves claims that Mutual illegally teamed up with King Pharmaceuticals (a unit of Pfizer Inc.) to delay the release of a generic version of muscle relaxer Skelaxin.

The Skelaxin agreement, which received preliminary approval in August, was approved by U.S. District Judge Curtis L. Collier. Mutual and end-payors (which included various trust funds and benefit entities that had purchased the muscle relaxant product) reached the settlement through a process of negotiations.

“The court finds that the settlement is fair, reasonable, and adequate to the end-payor settlement class,” the court documents read. “The court finds that the settlement of the end-payor settlement class members’ claims against Mutual was not the product of collusion between the class representatives and Mutual or their respective counsel, but rather was the result of bonafide and arm’s-length negotiations conducted in good faith between class counsel and Mutual’s counsel.”

According to claims in the lawsuit, King paid Mutual $200 million to delay the release of a metalaxone, a generic form of Skelaxin. The end-payors alleged this agreement that kept generic versions of Skelaxin off the market until 2010 violated federal and state antitrust statutes, consumer protection laws, and unjust enrichment laws.

Class counsel was also granted a little less than $1 million (in addition to $3 million in attorney’s fees) and a portion of the interest from the settlement fund to cover expenses. The plaintiffs were awarded an aggregate award of incentive fees for their participation in the prosecution of the case totaling $60,000.

The first group of end-payors’ lawsuits included in a large MDL against defendants Mutual and King was filed in March 2012. A settlement was reached in April 2014 in the amount of $73 million that resolved claims of those who directly purchased from King. There was also an indirect purchaser class action settlement for $2 million that involved the settlement money being donated to charitable, nonprofit or governmental organizations.

Additionally, King filed a separate brief last week in opposition of a motion by Walgreen Co., Rite Aid Corp. and other plaintiffs, saying that King and its subsidiary, Monach Pharmaceuticals Inc. must be treated as two distinct entities. King argued that they have treated the two as one entity from the beginning of the case.

Judge Collier summarized, “Class Counsel and the End-Payor Settlement Class would have faced numerous and substantial risks in establishing both liability and damages against Mutual if they had decided to continue to litigate rather than settle, and the Settlement Amount is well within the range of reasonableness in light of the best possible recovery and the risks the Parties would have faced if the case had continued to verdicts on both liability and damages.”

The end-payor Class is represented by Branstetter Stramch & Jennings PLLC, Wexler Wallace LLP, Barrett Johnston LLC, Scott+Scott LLP and the Dugan Law Firm.

The Skelaxin Pay-For-Delay Class Action Lawsuit is In re: Skelaxin (Metaxalone) Antitrust Litigation, Case No. 1:12-md-02343, in the U.S. District Court for the Eastern District of Tennessee.