Courtney Jorstad  |  October 22, 2014

Category: Legal News

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Nexium settlementDr. Reddy’s Laboratories was removed as a defendant in a Nexium antitrust class action lawsuit that is underway as part of a settlement by agreeing to help the drug buyers at the trial against the three remaining defendants.

The direct purchaser class, which includes pharmacies and drug stores, filed a motion for preliminary approval of the class action settlement, in which AstraZeneca, and generic drug makers, Ranbaxy Pharmaceuticals and Teva Pharmaceuticals, will remain as defendants.

“In exchange for [Dr. Reddy’s] cooperation at trial against [Dr. Reddy’s] co-defendants, the proposed settlement releases [Dr. Reddy’s] from all claims by plaintiffs in the class action,” the motion states.

“Class counsel have determined that cooperation provided for in the settlement will significantly enhance plaintiffs’ prospects at trial,” it adds.

In December 2013, the Massachusetts federal court approved a class, which included any person or business “who purchased Nexium directly from AstraZeneca at any time during the period from Aug. 27, 2008 through Dec. 11, 2013.”

The plaintiffs allege that AstraZeneca, Ranbaxy, and Teva engaged in an “overarching conspiracy to delay the introduction of generic versions of the prescription drug Nexium (delayed-release esomeprazole magnesium).”

The Direct Purchaser Class had alleged that Dr. Reddy’s had “violated the federal antitrust law by inter alia,” by being a part of that conspiracy.

“Plaintiffs allege that, as a result of these antitrust violations, they were forced to pay artificially inflated prices for esomeprazole magnesium,” the motion filed Sunday explains.

Dr. Reddy’s “denies plaintiffs allegations of unlawful or wrongful conduct, and denies that any conduct challenged by plaintiffs caused any damage whatsoever, and have asserted a number of defenses to plaintiffs claims.”

After substantial negotiating and discovery into Dr. Reddy’s involvement in the pay-for-delay conspiracy “plaintiffs, on behalf of the direct purchaser class, agreed, subject to the court’s approval, to settle their claims against [Dr. Reddy’s].”

As part of the agreement, Dr. Reddy’s will “provide various forms of cooperation at trial to plaintiffs and the direct purchaser class in exchange for a full and complete settlement and release of all claims that plaintiffs have asserted or could have asserted in the direct purchaser class action arising from the challenged conduct and relating to the purchase of esomeprazole pending before this court.”

The plaintiffs allege that the federal antitrust laws were broken when AstraZeneca paid Teva to not sell a generic version of the acid reflux drug. They also allege Ranbaxy and Dr. Reddy’s was part of the conspiracy.

U.S. District Judge William G. Young said Monday that he is “grateful” that a deal was reached that excluded Dr. Reddy’s.

Judge Young also said that plaintiffs could not submit newspaper articles as evidence with statements by Ranbaxy’s CEO.

The judge said in January that the pay-for-delay lawsuit would go to trial on March 3 if a settlement wasn’t reached.

A class action settlement was reached over Nexium in a different class action lawsuit in 2013, alleging that AstraZeneca had deceptively marketed the heart burn medicine.

Teva is represented by Laurence A. Schoen and Adam L. Sisitsky of Mintz Levin Cohn Ferris Glovsky & Popeo PC and by Karen N. Walker, Rebecca A. Koch and Jay P. Lefkowitz of Kirkland & Ellis LLP.

Ranbaxy is represented by J. Douglas Baldridge, Lisa Jose Fales, Danielle R. Foley and Sarah Choi of Venable LLP and Leslie F. Su of Minerva Law PC.

Dr. Reddy’s is represented by Kevin D. McDonald and Michael T. Marcucci of Jones Day and Andrew J. Miller of Budd Larner PC.

AstraZeneca is represented by Dane H. Butswinkas and John Schmidtlein of Williams & Connolly LLP and William A. Zucker and Michael P. Kelly of McCarter & English LLP.

The direct purchaser plaintiffs are represented by Hagens Berman Sobol Shapiro LLP, Berger & Montague PC, and Garwin Gerstein & Fisher LLP.

The end payor plaintiffs are represented by Berman DeValerio Hilliard & Shadowen LLC, Pomeranttz LLP, Wexler Walllace LLP and Cohen Milstein Sellers & Toll PLLC.

The Antitrust Pay-for-Delay Class Action Lawsuit is In re: Nexium (Esomeprazole Magnesium) Antitrust Litigation, Case No. 1:12-md-02409, in the U.S. District Court for the District of Massachusetts.

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