Nexium Class Action Plaintiffs Seek Injunction to Stop Pay-For-Delay Deals

On Thursday, two groups of Nexium purchasers in the Nexium antitrust class action lawsuit filed a reply supporting their motion for an injunction to stop drug maker, AstraZeneca, from following through on and making new agreements to delay launch of generic drugs with other drug makers.

The plaintiffs, direct and indirect Nexium purchasers, argued in their filing that drug makers Ranbaxy Inc. and AstraZeneca PLC are “serial violators” of antitrust laws that prohibit companies from making agreements that squelch competition and lead to artificially high prices for consumers. At issue are allegations that the drug makers entered into agreements to delay the release of cheaper generic versions of pharmaceutical drugs, keeping prices high for those who need them.

The plaintiffs allege in their filing that AstraZeneca made a large payment to Ranbaxy with no justification with anticompetitive effects. Although the plaintiffs recently lost a case over claims that a patent settlement between the drug makers harmed them, they point out that the jury in that case found that the payment between the two companies harmed the plaintiffs.

AstraZeneca and Ranbaxy “refuse to come to grips with [the] incontrovertible facts” that the jury concluded they had violated federal antitrust law, argue the plaintiffs in their reply. The plaintiffs claim that an injunction is necessary to stop the companies from causing “massive consumer harm” when Ranbaxy launches the generic version of the heart burn drug. “[T]he jury has found the agreement to be unlawful,” argue the plaintiffs, “and it poses a significant threat of causing future harm.”

The plaintiffs further allege that AstraZeneca “consistently” uses these types of payouts and agreements to cause drugmakers to delay market entry of generic versions of drugs.

“The jury having determined that defendants’ no-AG pledge injured competition in a billion-dollar market, the court should enjoin defendants from including such clauses in future settlements and from enforcing or adhering to such clauses in existing agreements,” the plaintiffs wrote.

This class action lawsuit is the first pay-for-delay lawsuit to go to trial since the U.S. Supreme Court ruled in 2013 that the Hatch-Waxman Act patent settlements could face antitrust scrutiny. The plaintiffs claim that through one of these settlements, AstraZeneca is attempting to retain profits from Nexium by paying generic drug makers like Ranbaxy to stop them from entering the market. The jury in this case found that a “large and unjustified” payment had been made and the anti-competitive harms of the deal outweighed the benefits, but also that the generic drug makers would not have been granted an earlier entry date for their drugs even without the payment.

Direct purchaser, end payors, and individual retailers in the Nexium antitrust class action lawsuit filed motions for a new trial in Massachusetts federal court in January.

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,Pomerantz LLP, Wexler Wallace LLP and Cohen Milstein Sellers & Toll PLLC.

The Nexium Antitrust 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.

UPDATE: A settlement has been reached to resolve a portion of this Nexium antitrust class action lawsuit. Details on the deal can be found here.