Lidoderm Pain Patch Buyers Win Certification in Antitrust MDL

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A California federal judge has certified a class of Lidoderm pain patch buyers in an antitrust multidistrict litigation against Endo Pharmaceuticals, finding that both direct purchasers and end payors sufficiently demonstrated common injuries related to the reported delay of a generic version of the anesthetic.

The plaintiffs filed suit, arguing that the defendant’s alleged collusion to delay the market release of a generic version of the Lidoderm pain patch resulted in consumers paying significantly inflated prices for the non-generic drug, in violation of federal antitrust laws and related state laws.

Endo and other defendants vehemently oppose the allegations, asserting that direct purchasers and end payors have individualized issues that swamp any common ones.

On Tuesday, U.S. District Judge William Orrick sided with the plaintiffs, issuing a 52-page order stating the case is “more appropriate for class certification than not.” Common questions predominate despite the defendants’ stance that there is a highly stratified distribution chain for pharmaceutical drugs that creates a multitude of individualized issues.

“Defendants’ arguments against certification would result in certification of very few antitrust cases as a class actions, despite repeated direction from the Supreme Court that the class device is particularly useful in the antitrust context,” Judge Orrick said in the February 21 Order. “Plaintiffs’ experts (and indeed, defendants’ experts) have presented reliable, statistically-sound methods to determine not only classwide injury but also proof of aggregate damages.”

In addition to granting class certification, Judge Orrick rejected Daubert’s bids to exclude expert testimony from Endo and from the end payor plaintiffs.

Consolidated in 2014, the Lidoderm pain patch multidistrict litigation centers on claims that Teikoku Pharma USA Inc. and Endo engaged in an unlawful $266 million agreement with Watson (now owned by Allergan PLC) to delay the release of the generic version of the anesthetic patch. Buyers of the Lidoderm pain patch say the pact amounted to illegal “pay-for-delay” arrangements that violate anti-competition laws.

In November, Judge Orrick denoted that he would most likely certify the two classes regardless if they should warrant “separate, complex methods to calculate aggregate damages.”

According to the Order, the direct purchasers class includes pharmaceutical wholesalers, pharmacies, hospitals, and retail stores that purchased brand and generic Lidoderm patches directly from defendants and supplied the product to others.

The end payor plaintiffs consist of employee health and welfare benefit plans, municipal corporations, employee unions, and individuals who purchased brand or generic Lidoderm from third parties.

Both class periods are from August 23, 2012, through May 1, 2014.

In considering the direct purchasers motion for class certification, Judge Orrick stated the group sufficiently proved common injuries, albeit members suffered different damages amounts.

“It is true that the different DPPs ultimately paid different prices for their brand and generic lidocaine patches because of their different sizes, purchase histories, and negotiating strength,” he said. “But simply because they were injured in different amounts does not undermine the fact they were injured.”

On the whole, Judge Orrick expressed that the questions over the “but-for price” that the plaintiffs would have paid if the alleged anti-competitive actions will be settled at summary judgment or trial.

“That there may then be a need to conduct individualized analysis to determine which plaintiffs were injured and how much in damages they should receive does not negate the significant common and predominant legal and factual questions that will have been resolved previously,” he said.

The direct purchasers are represented by Thomas M. Sobol and David S. Nalven of Hagens Berman Sobol Shapiro LLP, Burce E. Gerstein, Noah Silverman and Ephraim R. Gerstein of Garwin Gerstein & Fisher LLP, and Peter Kohn and Joseph T. Lukens of Faruqi & Faruqi LLP.

The end-payor plaintiffs are represented by Renae D. Steiner of Heins Mills & Olson PLC, Dena C. Sharp and Daniel C. Girard of Girard Gibbs LLP, Sharon K. Robertson and Donna M. Evans of Cohen Milstein Sellers & Tolls PLLC, and Joseph R. Saveri, Andrew M. Purdy, Ryan J. McEwan and Joshua P. Davis of Joseph Saveri Law Firm Inc as interim liaison counsel.

The Lidoderm Antitrust Class Action Lawsuit is In re: Lidoderm Antitrust Litigation, Case No. 3:14-md-02521, in the U.S. District Court for the Northern District of California.

UPDATE: June 2018, the Lidoderm generic delay class action settlement is now open. Click here to file a claim.

UPDATE 2: On Aug. 5, 2019, Top Class Actions viewers started receiving checks from the Lidoderm class action settlementworth as much as $1,836. Congratulations to everyone who filed a claim and got PAID!