In re Solodyn (Minocycline Hydrochloride) Antitrust Litig.

IN RE SOLODYN (MINOCYCLINE HYDROCHLORIDE) ANTITRUST LITIGATION

Civil Action No. 14-md-02503

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

January 25, 2018

MEMORANDUM AND ORDER

CASPER, J.

I. Introduction

This is a class action in which Direct Purchaser Plaintiffs ("DPPs" or "direct purchasers") allege that Defendants Medicis Pharmaceutical Corporation ("Medicis") and Impax Laboratories, Inc. ("Impax") (collectively, "Defendants"), violated Section 1 of the Sherman Act, 15 U.S.C. § 1, D. 91, and End-Payor Plaintiffs ("EPPs" or "end-payors") allege that Defendants have violated various state laws, D. 92.¹ The remaining claim of Retailer Plaintiffs² is that Defendants' actions violate Section 2 of the Sherman Act, 15 U.S.C. § 2. D. 216; D. 218; D. 266. After the Court granted the parties leave to file summary judgment motions, D. 684, Defendants filed three motions, seeking summary judgment on market power, D. 717, causation, D. 718, and all claims arising out of Medicis's settlements with Sandoz and Lupin, D. 719. The Plaintiff classes andRetail Plaintiffs ("Consolidated Plaintiffs" or "Plaintiffs") filed a motion for partial summary judgment. D. 747. Additionally, the parties have filed numerous motions to exclude expert testimony. D. 711; D. 712; D. 713; D. 714; D. 715; D. 716; D. 741; D. 742; D. 743; D. 744; D. 745; D. 746; D.748; D. 749; D. 750; D. 751. Defendants have also filed a motion for leave to serve an additional expert opinion, of Dr. Louis Rossiter, to rebut the testimony of Plaintiffs' expert Dr. Stephen Schondelmeyer. D. 892.

For the reasons set forth below, the Court DENIES Consolidated Plaintiffs' motion for summary judgment on market power, D. 747, and ALLOWS IN PART and DENIES IN PART Defendants' motion for summary judgment on market power, D. 717. The Court DENIES Defendants' motion for summary judgment on causation, D. 718, and DENIES Defendants' motion for summary judgment on claims arising from Medicis's settlements with Sandoz and Lupin, D. 719. Of the numerous Daubert motions, the Court, at this time, resolves only those relating to the pending motions for summary judgment. The Court DENIES the following motions to exclude: Plaintiffs' expert Dr. Christopher Baum, D. 741; Plaintiffs' expert Dr. Arthur Kibbe, D. 716; Retailer Plaintiffs' expert Dr. Keith Leffler, D. 712; Plaintiffs' expert Dr. Meredith Rosenthal, D. 745; Plaintiffs' expert Dr. Stephen Schondelmeyer, D. 711; Plaintiffs' expert Dr. Neelam Vashi, D. 714; Defendants' experts Dr. Sumanth Addanki and Dr. Guy Webster, D. 748; and Defendants' experts Dr. Robert S. Langer and R. Polk Wagner, D. 751. The Court ALLOWS IN PART and DENIES IN PART the motions to exclude Plaintiffs' expert John Doll, D. 715; and Plaintiffs' expert Dr. Thomas McGuire, D. 744, and Plaintiffs' experts John Thomas and PeterHardigan, D. 713.³ The Court also ALLOWS Defendants' motion for leave to serve Dr. Louis Rossiter's expert testimony, D. 892.

II. Standard of Review

A. Summary Judgment

The Court grants summary judgment where there is no genuine dispute as to any material fact and the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). "An issue is genuine if 'it may reasonably be resolved in favor of either party' at trial, and material if it 'possess[es] the capacity to sway the outcome of the litigation under the applicable law.'" Iverson v. City of Boston, 452 F.3d 94, 98 (1st Cir. 2006) (alteration in original) (quoting Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir. 1997)). The movant "bears the burden of demonstrating the absence of a genuine issue of material fact." Rosciti v. Ins. Co. of Pa., 659 F.3d 92, 96 (1st Cir. 2011) (quoting Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000)). If the movant meets its burden, the nonmovant "must, with respect to each issue on which she would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in her favor." Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010). "As a general rule, that requires the production of evidence that is 'significant[ly] probative.'" Id. (alteration in original) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). "Neither party may rely on conclusory allegations or unsubstantiated denials, but must identify specific facts derived from the pleadings, depositions, answers to interrogatories, admissions and affidavits to demonstrate either the existence or absence of an issue of fact." Magee v. United States, 121 F.3d 1, 3 (1st Cir. 1997). The Court views the record "in the light most favorable tothe non-moving part[y]" and draws all reasonable inferences in the nonmovant's favor. Pineda v. Toomey, 533 F.3d 50, 53 (1st Cir. 2008).

B. Motions to Exclude Expert Opinions (Daubert Motions)

Pursuant to Fed. R. Evid. 702, a qualified expert witness can testify "in the form of an opinion, or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case." United States v. Mooney, 315 F.3d 54, 62 (1st Cir. 2002) (quoting Fed. R. Evid. 702). The Court must "ensur[e] that an expert's testimony both rests on a reliable foundation and is relevant to the task at hand." Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993). "The district court, as gatekeeper, must 'ensure that there is an adequate fit between the expert's methods and his conclusions.'" Am. Sales Co., LLC v. AstraZenica LP (In re Nexium (Esomeprazole) Antitrust Litig.) ("Nexium"), 842 F.3d 34, 52 (1st Cir. 2016) (quoting Samaan v. St. Joseph's Hosp., 670 F.3d 21, 32 (1st Cir. 2012)). "[T]he district court must perform [this] gatekeeping function by preliminarily assessing 'whether the reasoning or methodology . . . properly can be applied to the facts in issue'" by examining multiple factors through a case-specific inquiry. Seahorse Marine Supplies, Inc. v. P.R. Sun Oil Co., 295 F.3d 68, 80-81 (1st Cir. 2002) (quoting Daubert, 509 U.S. at 592-93). "As long as an expert's scientific testimony rests upon 'good grounds, based on what is known,' it should be tested by the adversary process—competing expert testimony and active cross-examination—rather than excluded from jurors' scrutiny for fear that they will not grasp its complexities or satisfactorily weigh its inadequacies." Ruiz-Troche v. Pepsi Cola of P.R. Bottling Co., 161 F.3d 77, 85 (1st Cir. 1998) (quoting Daubert, 509 U.S. at 590). "Vigorous cross-examination, presentation of contraryevidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence." Daubert, 509 U.S. at 596.

III. Relevant Factual Background

In light of the Court's prior rulings, see D. 184; D. 682, the Court will not recite all of the facts of this case, but instead addresses only the factual and procedural background relevant to the motions addressed herein.

Medicis is the New Drug Application ("NDA") holder of Solodyn, an extended release minocycline hydrochloride tablet, used to treat moderate to severe acne vulgaris. D. 724-1 ¶ 15; D. 847 ¶ 15. Minocycline is a tetracycline-class antibiotic, a category that also includes doxycycline, the branded delayed-release form of which is Doryx. D. 724-1 ¶¶ 19-20; D. 847 ¶¶ 19-20. Tetracyclines are considered "first-line therapy for moderate to severe acne." D. 724-1 ¶ 22; D. 847 ¶ 22.

On May 8, 2006, the FDA approved Solodyn in the 45 mg, 90 mg and 135 mg strengths ("Legacy Strengths"). D. 724-1 ¶ 16; D. 847 ¶¶ 16, 18. Medicis launched Solodyn in 2006. D. 724-1 ¶ 18; D. 847 ¶ 18. At the time of Solodyn's launch, there were other drugs on the market that also treated moderate-to-severe acne. D. 747-2 ¶ 1; D. 860 ¶ 1. Since its launch, Medicis engaged in promotional activity such as offering significant rebates to secure preferred formulary placement with health insurance companies and pharmacy benefit managers ("PBMs") and occasionally issued co-pay cards to certain patients, which reduced the price the patient paid for Solodyn at the pharmacy. D. 724-1 ¶ 25, 30; D. 847 ¶ 25, 30.

Medicis holds U.S. Patent No. 5,908,838 (the "'838 patent"), a "[m]ethod for the [t]reatment of [a]cne," which was filed on February 19, 1998, issued on June 1, 1999, and expires on February 19, 2018. D. 724-1 ¶¶ 49-50; D. 747-2 ¶ 42; D. 847 ¶¶ 49-50. In 2008, a third party submitted a request for reexamination of the '838 patent, and in June 2010, the United States Patentand Trademark Office ("PTO") upheld the validity of the patent and reissued it with several claims. D. 724-1 ¶¶ 51, 55; D. 847 ¶¶ 51, 55. On September 7, 2010, the PTO issued an additional patent to Medicis—U.S. Patent No. 7,790,705 (the "'705 patent"), covering "the method of dosing extended release minocycline hydrochloride according to weight to prevent certain adverse effects," D. 184 at 10—which expires in 2025. D. 724-1 ¶ 56; D. 847 ¶ 56. Medicis asserted the '705 patent against Lupin as to its Legacy Strength formulations. D. 724-1 ¶ 142; D. 847 ¶ 142. In July 2009 and August 2010, the FDA approved Solodyn in the 55mg, 65mg, 80 mg, 105mg and 11mg strengths ("Add-On Strengths"). D. 724-1 ¶¶ 109, 111; D. 847 ¶¶ 109, 111.

In October 2007, Impax submitted an Abbreviated New Drug Application ("ANDA") to the FDA to market generic Solodyn, amended in November 2007 to include all Legacy Strengths. D. 724-1 ¶ 77; D. 847 ¶ 77. In January 2008, Impax sought a declaratory judgment in the U.S. District Court for the Northern District of California that the '838 patent was invalid and/or not infringed by Impax's generic Legacy Strength Solodyn ANDA. D. 724-1 ¶ 78; D. 847 ¶ 78. The court dismissed the matter for lack of subject matter jurisdiction and Impax timely appealed. D. 724-1 ¶¶ 79-80; D. 847 ¶¶ 79-80. On ...