Generic drug distributors escape price-fixing class action

Generic drug price-fixing class action overview:

• Who: A Pennsylvania federal judge dismissed a generic drug price-fixing class action lawsuit filed against AmerisourceBergen Drug Corp., Cardinal Health Inc. and other drug distributors.
• Why: U.S. District Judge Cynthia M. Rufe found the indirect reseller plaintiffs failed to sufficiently allege the companies entered into an agreement with generic drug manufacturers to fix prices.
• Where: The generic drug price-fixing class action was filed in Pennsylvania federal court.

A Pennsylvania federal judge dismissed a generic drug price-fixing class action lawsuit filed against AmerisourceBergen Drug Corp., Cardinal Health Inc. and other drug distributors over claims they fixed prices. 

U.S. District Judge Cynthia M. Rufe ruled the indirect reseller plaintiffs, which include independent pharmacies and a hospital, failed to sufficiently allege the companies entered into an agreement with generic drug manufacturers to fix prices. 

“The (complaint) fails to allege specific facts that would show distributors entered into an agreement with manufacturers or even that the distributors were necessarily aware that manufacturers had entered into an agreement with one another,” Judge Rufe says. 

The class action was part of multidistrict litigation.

The indirect resellers argued the drug distributors violated the Sherman Act and state antitrust laws by allegedly passing anticompetitive messages between co-conspirator manufacturers. 

Judge finds plaintiffs failed to find sufficient evidence

Judge Rufe ruled the indirect resellers also failed to provide evidence to satisfy their burden of proof. 

“Although (the indirect resellers) have added evidence of additional conversations between distributor defendants and manufacturer defendants, many of the conversations they cite in briefing as demonstrative evidence of collusion are similar or identical to evidence already presented in their amended complaint,” the judge says. 

Judge Rufe also found the indirect resellers were barred from recovering damages under the Sherman Act due to the Illinois Brick doctrine, which she said dictates plaintiffs may only recover damages when they purchase the product directly from the antitrust violator.

Last year, Swiss pharmaceutical company Sandoz Group AG and its subsidiaries Sandoz Inc. and Fougera Pharmaceuticals agreed to pay $275 million to a class of end payor consumers, insurers and benefit funds to end claims against them in the MDL. 

What do you think of the decision to dismiss the generic drug price-fixing class action? Let us know in the comments.

The indirect resellers are represented by Brian C. Hill, Samantha L. Southall and Paul A. Haskel of Buchanan Ingersoll & Rooney PC and Joshua H. Eggnatz and Michael J. Pascucci of Eggnatz Pascucci PC.

The generic drug price-fixing class action lawsuit is Reliable Pharmacy, et al. v. Actavis Holdco U.S. Inc., Case No. 2:19-cv-06044, in the U.S. District Court for the Eastern District of Pennsylvania.

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