Wisconsin v. Indivior Inc. (In re Suboxone Antitrust Litig.)

622 F.Supp.3d 22

IN RE SUBOXONE (BUPRENORPHINE HYDROCHLORIDE AND NALOXONE) ANTITRUST LITIGATION

This Document Relates to: Wisconsin, et al. v. Indivior Inc. et al.

State of Wisconsin by Attorney General Brad D. Schimel, et al., Plaintiffs, v. Indivior Inc. f/k/a Reckitt Benckiser Pharmaceuticals, Inc., et al., Defendants.

MDL NO. 2445

13-MD-2445

CIV. A. NO. 16-5073

United States District Court, E.D. Pennsylvania

Filed August 22, 2022

MEMORANDUM OPINION

GOLDBERG, District Judge

TABLE OF CONTENTS

I. FACTUAL AND PROCEDURAL BACKGROUND 33

A. Regulatory Background 34

B. Suboxone Tablets 35

C. Plans for a New Formulation of Suboxone and Withdrawal of Suboxone Tablets 36

D. Reckitt Markets Film's Superiority to Tablet in Terms of Safety 37

E. Reckitt's Marketing of Film to Insurers 39

F. Reckitt's Steps Towards Withdrawal of the Suboxone Tablet 39

G. Reckitt Increases the Price of Tablets 40

H. Reckitt's Alleged Delay in the Shared REMS System 41

I. The Citizen Petition 44

J. Generic Launches 44

1. Actavis 44

2. Amneal 45

K. Procedural History 45

II. STANDARD OF REVIEW 45

III. RECKITT'S MOTION FOR SUMMARY JUDGMENT AS TO ALL ISSUES 46

A. Whether the Anticompetitive Harm to Consumers Outweighed the Procompetitive Benefits of Reckitt's Alleged Conduct 46

1. Whether Plaintiffs Have Produced Evidence of Anticompetitive Effect in the Form of Marketwide Harm to Consumers 47

2. Procompetitive Justifications for the Alleged Anticompetitive Conduct 49

a) Increasing Consumer Choice 50

b) Reduced Costs for Film 51

3. Balancing Procompetitive Benefits vs. Anticompetitive Harm 53

B. Whether Plaintiffs Can Prove Exclusion 56

C. Whether the Challenged Conduct is Lawful 59

1. Introduction of Film 63

2. Reckitt's Pricing Conduct 64

3. Safety Claims 67

4. Withdrawal of Branded Tablets 72

5. Reckitt's Efforts to Obtain Coverage for Suboxone Film from State Medicaid Agencies 75

6. Reckitt's Citizen Petition 77

a) Whether the Citizen Petition Caused Delay 78

b) Noerr-Pennington Protection 79

7. Delay in the Shared REMS Negotiations 80

IV. RECKITT'S MOTION FOR SUMMARY JUDGMENT PERTAINING TO SPECIFIC PLAINTIFFS AND REMEDIES 82

A. Whether MonoSol and Reckitt Could Enter into an Unlawful Conspiracy 83

B. Whether the Plaintiffs Can Seek an Injunction 85

C. Whether the DPPs' Damages Calculation and the States' Disgorgement Calculation Fail to Disaggregate the Effects of Lawful Conduct 85

D. Whether the DPPs' Damages Calculation and the States' Disgorgement Calculation Relies Upon Unsupported Assumptions Regarding Market Share 86

E. Whether DPPs Meijer, Inc. and Meijer Distribution Have a Valid Assignment of Claims 87

F. Whether the End Payor Plaintiffs Failed to Prove Damages or Injury 88

V. CONCLUSION 89

Defendant Reckitt Benckiser, Inc. ("Reckitt") manufactures Suboxone, a drug commonly used to combat opioid addiction.¹ Suboxone previously came in tablet form, but in 2010, citing safety concerns, Reckitt effectuated a change in the administration of this drug, switching from tablet to sublingual film. Various purchasers/consumers of Suboxone—including a group of direct purchasers, a group of ultimate consumers, and a group of States' Attorneys General (collectively, "Plaintiffs")—claimed that this switch was anticompetitive and solely designed to maintain Reckitt's market exclusivity, a scheme known as a "product hop." These claims have resulted in multi-district, antitrust litigation before this Court.

Before me are two Motions for Summary Judgment filed by Reckitt, one pertaining to all claims and a second pertaining to specific plaintiffs and remedies. Because I find that issues of material fact exist, I will deny both motions. This Opinion sets forth my reasoning.

I. FACTUAL AND PROCEDURAL BACKGROUND

In connection with the summary judgment briefing, Reckitt has submitted 126 pages of "undisputed facts," while Plaintiffs have submitted 339 pages of "responses and objections" as well as 159 pages of "additional" facts. In response, Reckitt submitted another 53 pages of "responses" to Plaintiffs' additional facts. Aside from requiring an enormous amount of judicial resources, any attempt to synthesize these submissions would essentially amount to a trial on the papers. Accordingly, the following factual recitation sets forth a more concise version of the pertinent facts. To the extent a review of additional evidence is necessary, I will examine that evidence in the "Discussion" section.

For purposes of general background, the following facts are derived from the evidence submitted by the parties. Where there is conflicting evidence about a particular fact, Federal Rule of Civil Procedure 56 requires that I view such evidence in the light most favorable to Plaintiffs.²

A. Regulatory Background

To understand the claims and defenses in this case, a brief overview of certain regulatory processes is necessary. As previously set forth in my Memorandum Opinion granting class certification:

1. Generic Drug Approval Process

Under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301-92 ("FDC Act"), a manufacturer who creates a new drug must obtain the approval of the Food and Drug Administration ("FDA") to sell the new drug by filing a New Drug Application ("NDA"). An NDA must include submission of specific data concerning the safety and efficacy of the drug, as well as any information on applicable patents.

In an effort to speed the entry of generic drugs into the market, Congress passed the Drug Price Competition and Patent Term Restoration Act of 1984 ("Hatch-Waxman"), 12 U.S.C. § 355. Hatch-Waxman provides brand-name manufacturers with several means, in addition to traditional patent rights, to obtain protection from generic competition for set, and specifically limited, periods of time. For example, . . . [i]f an NDA drug treats a rare condition, the FDA may grant seven years of orphan drug exclusivity during which time no corresponding generic drug may be approved or commercialized.

The Hatch-Waxman Act also simplified the regulatory hurdles for prospective generic manufacturers by eliminating the need for them to duplicate the clinical studies used to obtain approval for the brand-name counterpart drug. Under the Act, generic manufacturers may file and gain approval for their drugs through filing an Abbreviated New Drug Application ("ANDA"), which relies on the scientific findings of safety and efficacy included by the brand-name drug manufacturer in the original NDA. The ANDA filer must scientifically establish that the generic drug it intends to market is just as safe and effective as the corresponding brand-name drug through demonstrations of bioequivalence, i.e., that the generic product delivers the same amount of active ingredient into a patient's blood stream for the same amount of time as does the corresponding brand-name drug, and hence has the same clinical effect.

Oral drugs proven to be both bioequivalent and pharmaceutically equivalent—meaning the generic drug has the same active ingredient as the branded oral drug—receive an "AB" rating from the FDA, indicating they are therapeutically equivalent to other drugs with the same rating in the same category. In most cases, only oral generic drugs with an AB rating may be substituted by pharmacists for a physician's prescription of a brand-name drug without the physician's approval. Once the FDA approves an ANDA and determines that the generic drug is AB-rated to the branded drug, state laws govern how the generic may be substituted for the brand-name drug prescribed by physicians. In most states and under most health plans, a pharmacist may, and in many cases must, substitute an AB-rated generic drug for a prescribed brand-name drug.

Competition from low cost AB-rated generic drugs saves consumers billions of dollars a year. When an AB-rated generic drug enters the market, the brand-name company often suffers a rapid, steep decline in sales. AB-rated generic competition enables direct and indirect purchasers to obtain both the generic drugs and the brand-name drugs at substantially lower prices.

2. The SSRS/REMS Process

Under the FDA Amendments Act of 2007, the FDA has the authority to require Risk Evaluation and Mitigation Strategies ("REMS") from manufacturers to ensure that the benefits of a drug or biological product outweigh its risks. A REMS can include a medication guide, a package insert, and potential restrictions on the distribution of the drug. If a REMS is required for a particular generic product, the FDA will withhold ANDA approval until such time that an appropriate REMS has been created by the ANDA sponsor. The FDA can also require that ANDA sponsors coordinate with the manufacturer of the branded counterpart drug for the purposes of creating a Single Shared REMS program ("SSRS"), which is a single REMS program to be used by both the sellers of the brand drug and AB-rated generic equivalents. Congress has specifically prohibited brand-name drug manufacturers from using REMS "to block or delay approval of" ANDAs.

3. Citizen Petitions

Pharmaceutical companies have multiple avenues and opportunities through which to communicate their views to the FDA. One such avenue is by filing a "Citizen Petition," which provides a forum for individuals or businesses to express and support genuine concerns about the safety, scientific, or legal issues regarding a product at any time before, or after, market entry. To move the FDA to take action regarding drug approval requirements, the petition must include supportive, clinically meaningful data, and the requested relief must be consistent with the Hatch-Waxman statutory and regulatory framework. The FDA must respond to each Citizen Petition within 180 days after the date on which the petition was submitted, and the response may approve the request in whole or in part, or deny the request. A response to a Citizen Petition may be appealed under the Administrative Procedures Act.

In re Suboxone Antitrust Litig., 421 F. Supp. 3d...