$2M Skelaxin Class Action Settlement Reached with Indirect Purchasers

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Indirect purchasers of the muscle relaxant Skelaxin have reached a $2 million class action lawsuit settlement with Mutual Pharmaceutical Company Inc. over allegations that Mutual was part of a pay-for-delay scheme that suppressed generic competition for the drug.

The deal was announced on May 28, nearly a month after a federal judge granted preliminary approval to a $73 million Skelaxin class action settlement reached with direct purchasers of the drug.

In January 2012, a group of plaintiffs representing various types of purchasers of Skelaxin and its generic equivalent filed class action lawsuits against Mutual and its alleged co-conspirator, King Pharmaceuticals LLC, alleging that the two companies engaged in unlawful and anti-competitive conduct in delaying the market entry of metaxalone in violation of antitrust law, state unfair and deceptive trade practices acts, and the law of unjust enrichment.

On Jan. 20, the court declined to certify the proposed Class. According to the court, they declined to certify the 49-state Class based on choice-of-law issues because “applying the law of forty-nine states likely renders this Class simply unmanageable.”

Intensive discussions concerning resolution of the Skelaxin class action lawsuit began in February, culminating in a final settlement agreement executed as of April 24.

The Skelaxin settlement agreement calls for “Mutual to pay the settlement amount of $2 million into an escrow account within thirty days after preliminary approval. In exchange, plaintiff and Class Members will release Mutual from claims relating in any way to the matters alleged in the complaint.”

Class Members of the Skelaxin indirect purchaser settlement include all persons of entities in the United States that operate a business outside Tennessee and indirectly purchased Skelaxin for resale at any time since Nov. 4, 2005.

These Class Members will not receive monetary compensation from the proposed class action settlement; instead, the money will be distributed to charities through a cy pres fund.

In class action lawsuits, courts have normally approved the creation of cy pres funds, to be used for a charitable purpose when it is difficult for all Class Members to receive individual shares of the recovery.

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.