In Re: Plavix Indirect Purchaser Antitrust Litigation, Case No. 1:06-cv-226

IN RE: PLAVIX INDIRECT PURCHASER ANTITRUST LITIGATION

Case No. 1:06-cv-226

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

Dated: January 31, 2011

This Document Relates to: All Actions

Judge Michael H. Watson

OPINION AND ORDER

I. INTRODUCTION

This matter arises from actions against Defendant pharmaceutical manufacturers, Sanofi Aventis and Sanofi-Synthelabo, Inc. ("Sanofi Aventis") and Bristol-Myers Squibb Company and Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership {"BMS") (collectively "Sanofi") and Apotex Corporation ("Apotex") (collectively "Defendants"). These cases involve Plavix, a pioneer clopidogrel bisulfate drug used to treat patients at risk for heart attacks and strokes. Sanofi manufacturers Plavix. Apotex was the first generic applicant to seek Federal Drug Administration ("FDA") approval to market a generic version of Plavix in the United States.

Claims are brought by the Indirect Purchaser Plaintiffs ("Plaintiffs") under the Clayton Act for injunctive relief, 15 U.S.C. § 26, and under state antitrust and consumer protection statutes. Plaintiffs assert Defendants' alleged illegal agreements prevented Defendants from entering into a legal competitive agreement which would have permitted the generic version of Plavix to enter the market at an earlier date and thusallowed Plaintiffs to purchase the generic drug at a lower price. Plaintiffs claim that they have suffered damages as a result of Defendants' "anticompetitive conduct and scheme" which denied Plaintiffs "sustained market entry of less expensive, generic versions of Plavix" and required Plaintiffs to pay more for clopidogrel bisulfate drugs than they would have absent the anticompetitive conduct and scheme. End-Payor Plaintiffs' First Am. Consolidated Class Action Compl. 2, ECF No. 81 (hereinafter "Amended Complaint" or "Am. Compl.").

The Court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1337(a). This Court has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367(a). This Court has jurisdiction over the putative class action pursuant to 28 U.S.C. § 1332(d)(2) which provides that district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000, 000, exclusive of interest and costs, and is a class action in which "any member of a class of plaintiffs is a citizen of a State different from any defendant...." 28 U.S.C. § 1332(d)(2)(A). Venue is proper in this Court pursuant to 15 U.S.C. § 22 because each Defendant transacts business here.

Defendants Sanofi and Apotex have moved the Court to dismiss the claims, pursuant to Fed. R. Civ. P. 12(b)(6), asserting that Plaintiffs have failed to allege the necessary elements of an antitrust action: a sufficient violation of antitrust laws and an antitrust injury. Defs.' Mots. Dismiss, ECF Nos. 87 & 88. For the reasons that appear below, Defendants' motions are GRANTED.

II. BACKGROUND

The Court's previous Opinion and Order sets forth the complete background, facts, and parties to these cases, including an overview of the regulatory system governing the drug approval process, Apotex's ANDA and the patent litigation agreements between Sanofi and Apotex, and the generic drug launch by Apotex. Kroger Co. v. Sanofi-Aventis, 701 F. Supp. 2d 938 (S.D. Ohio 2010). The Court adopts and incorporates by reference that related Opinion and Order into this Opinion, specifically the findings regarding the absence of antitrust injury. Id. It is imperative to note that the basis of the claims in the cases sub judice are premised on the same alleged "injury" the Court disposed of in the aforementioned Opinion. Familiarity with that decision is presumed.

In this case, the Indirect Purchaser Plaintiffs' Amended Complaint alleges three causes of action: Count One seeks injunctive relief under Section 16 of the Clayton Act, 15 U.S.C. § 26; Count Two alleges a restraint of trade in violation of the antitrust and/or consumer protection statutes of the indirect purchaser states, including twenty-two states' laws and the District of Columbia; and Count Three alleges a claim for restitution, disgorgement, and constructive trust for unjust enrichment by Defendants.

The thrust of Plaintiffs' allegations is that but for Defendants entering into the March and May Agreements, Defendants would have instead entered into an agreement with terms more favorable to Plaintiffs. Plaintiffs claim Defendants would have either (1) entered into a licensing agreement granting Apotex a license to market its generic version of Plavix for a continuous and sustained period before the 2011 patent expiration date; or, alternatively (2) Sanofi would have given up some of its patent's life in exchange for delayed entry of Apdtex's generic after Apotex received FDA approval. Plaintiffs allege either of these alternative allegedly procompetitiveagreements would have avoided the '265 patent trial and would have allowed Plaintiffs to receive the benefit of cost savings through generic competition.

III. STANDARD ON MOTION TO DISMISS

A claim survives a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) if it "contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). "The plausibility standard is not akin to a 'probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. A complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all of the complaint's allegations are true." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007) (internal citations omitted).

A court must also "construe the complaint in the light most favorable to the plaintiff." Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002). In doing so, however, plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555; see also Iqbal, 129 S. Ct. at 1949 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."); Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. 2007). Particularly in the antitrust context, the Supreme Court cautions that "a district court must retain the power to insist on some specificity in pleading before allowing a potentially massive factual controversy to proceed." Mich. Division-Monument Builders of N. Am. v. Mich. Cemetery Ass'n, 524 F.3d 726, 731-32 (6th Cir. 2008) (quoting Twombly, 550 U.S. at 558). The Supreme Court reminded lower courts that "it is one thing to be cautious before dismissing an antitrust complaint in advance of discovery, but quite another to forget that proceeding to antitrust discovery can be expensive." Twombly, 550 U.S. at 558 (internal citations omitted). "[A] naked assertion... gets the complaint close to stating a claim, but without some further factual enhancement it stops short of the line between possibility and plausibility...." Id. Thus, "something beyond the mere possibility of [relief] must be alleged, lest a plaintiff with a largely groundless claim be allowed to take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value." Id. (internal citations omitted); see also NicSand, Inc. v. 3M Co., 507 F.3d 442, 450 (6th Cir. 2007) (en banc).

IV. DISCUSSION

Defendants Sanofi and Apotex seek dismissal of all three of Plaintiffs' counts. A. Count I: Injunctive Relief

Count I of Plaintiffs' Amended Complaint pleads a claim for injunctive relief under Section 16 of the Clayton Act for Defendants' alleged violations of Sections 1 and 2 of the Sherman Act. Am. Compl. ¶¶ 159-67. Defendants seek to dismiss Count I arguing that the Indirect Purchaser Plaintiffs lack standing to pursue a claim for injunctive relief because no threat of future injury or violation of the antitrust laws exists. Defendants claim that because Apotex launched at risk and was subsequently enjoined from the sale of generic clopidogrel bisulfate until the expiration of the patent, no circumstances exist in which injunctive relief would provide any further relief to Plaintiffs. Essentially, Defendants aver, there is nothing for the Court to enjoin. Furthermore, Defendants oppose Plaintiffs' attempts to obtain an injunction preventing the practice of enteringinto reverse payment agreements claiming such injunction would be vague.

Plaintiffs seek to enjoin "Defendants from, directly or indirectly, entering an agreement to resolve or settle a patent infringement claim in which an ANDA filer receives a cash payment or anything of value in exchange for an agreement not to research, develop, manufacture, market, or sell the ANDA product for any period of time." Id. at ¶ 166. Plaintiffs state they are "threatened with future injuries as a result of collusive agreements that prevent or delay generic entry...." Id. at ¶ 165. Plaintiffs assert the injunctive relief they seek is not specific to clopidogrel bisulfate, but instead is focused on the practice of entering into reverse payment agreements. Pis.' Memo Opp'n 9, ECF No. 94. Plaintiffs insist they incurred an antitrust injury as a result of the March and May agreements and that this economic injury from a lack of competition is the same type of future injury that is threatened by the practice of reverse payment agreements that they seek to enjoin. Id. at 10.

Section 16 of the Clayton Act, authorizing suits for injunctive relief, provides in part:

Any person, firm, corporation, or association shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a violation of the...