Wisconsin v. Indivior Inc. (In re Suboxone (Buprenorphine Hydrochloride & Naloxone) Antitrust Litig.)

IN RE SUBOXONE (BUPRENORPHINE HYDROCHLORIDE

AND NALOXONE) ANTITRUST LITIGATION

THIS DOCUMENT RELATES TO:

Wisconsin, et al. v. Indivior Inc. et al. Case No. 16-cv-5073

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 FOR THE EASTERN DISTRICT OF PENNSYLVANIA

September 8, 2017

Goldberg, J.

MEMORANDUM OPINION

In this next installment of the ongoing antitrust litigation regarding the prescription drug Suboxone, a collection of states¹ (collectively, "Plaintiffs" or the "States"), have brought suit against Defendants Indivior Inc., f/k/a Reckitt Benckiser Pharmaceuticals, Inc.; Reckitt Benckiser Healthcare (UK) Ltd.; and Indivior PLC, f/k/a/ Reckitt Benckiser Group, plc; and MonoSol Rx, LLC (collectively "Defendants"). The States' lawsuit follows previously-filedclaims brought by several putative classes and a generic drug company. Similar to these prior claims, the States' Amended Complaint details antitrust allegations under §§ 1 and 2 of the Sherman Antitrust Act, allegations of an antitrust conspiracy between Indivior, Inc. ("Indivior")² and MonoSol Rx, LLC, and multiple state law claims in connection with Defendants' alleged use of a multi-pronged anticompetitive scheme. According to the States, this scheme was designed to prevent or delay less expensive generic versions of the Suboxone tablet from entering the market in order to preserve their profits from the sale of Suboxone. Currently pending is Defendant Indivior's ("Moving Defendant") Motion to Dismiss the Amended Complaint. For the following reasons, I will deny the motion in its entirety.

I. FACTS ALLEGED IN THE AMENDED COMPLAINT³

The following facts are set forth in the States Amended Complaint:

A. Generic Drug Approval Process

The federal Food and Drug Administration ("FDA") regulates the manufacture and commercial sale of pharmaceutical drugs under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq. (Am. Compl. ¶ 26.) The manufacturer of a new drug must submit a new drug application ("NDA") that demonstrates, among other things, a drug's safety, clinically proven effectiveness, composition, and patent coverage. (Id.)

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 (the "Hatch-Waxman Act"), under which generic drug manufacturers may receive FDA approval for generic drugs without replicating the clinical trials involved in an NDA. (Id. ¶ 27.) In lieu of an NDA, a generic drug manufacturer may submit an abbreviated new drug application ("ANDA") and incorporate data, such as clinical studies, that the NDA filer submitted to the FDA. (Id. ¶ 28.) To be approved, an ANDA must demonstrate that the generic drug (a) has the same active ingredients as; (b) is pharmaceutically equivalent to (same dosage form and strength); and (c) is bioequivalent to (exhibiting the same drug absorption characteristics) the previously approved drug. (Id. ¶ 29.)

Oral drugs proven to be both pharmaceutically equivalent and bioequivalent to a 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. (Id. ¶ 30.) In most cases, only oral 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. (Id.) The FDA publishes a list of all approved drugs and therapeutic equivalents in the Approved Drug Products with Therapeutic Equivalence Evaluations (the "Orange Book"). (Id. ¶ 31.)

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. (Id. ¶ 32.) 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. (Id. ¶ 32.)

B. Suboxone Tablet's Orphan Drug Designation

In 2002, Indivior introduced Suboxone, designed for the treatment of opioid addiction, as a sublingual tablet. (Id. ¶¶ 33, 37.) At that time, the two component ingredients of Suboxone—naloxone and buprenorphine—were not subject to any patent protection. (Id.) In 1994, and in lieu of exclusivity through patent protection, the FDA granted Indivior's Suboxone tablets a seven-year period of exclusivity as an "orphan drug"⁴ based on Indivior's representation that it would be unlikely to recover the costs of developing and marketing the drug. (Id. ¶¶ 34, 36-37.) Nonetheless, Suboxone did not obtain actual marketing exclusivity until 2002, thus allowing Indivior to market the sublingual Suboxone tablet until October 8, 2009, without the threat of competition from any generic co-formulated buprenorphine/naloxone tablet. (Id. ¶ 37.) Indivior allegedly earned more than $2 billion on Suboxone tablets by 2010. (Id. ¶ 38.)

C. Indivior's Alleged Product-Hopping Scheme

1. Threat of Generic Entry in the Co-formulated Buprenorphine/Naloxone Market

As a general rule, when AB-rated generic drugs become available, lower-priced generic competitors may be rapidly substituted for their brand-name counterparts because the Hatch-Waxman Act and state drug product selection laws permit, and in many cases require, pharmacists to substitute an AB-rated generic drug for the branded version unless the prescription specifically states otherwise. (Id. ¶ 40.) Soon after a generic competitor enters themarket, manufacturers of brand-name drugs typically lose eighty percent or more of their sales to lower-priced generics. (Id. ¶ 41.)

As the orphan drug exclusivity period for Suboxone tablets neared expiration, Indivior became concerned that lower-priced generic versions of co-formulated buprenorphine/naloxone would enter the market and significantly reduce its sales and revenue of Suboxone tablets. (Id. ¶¶ 39, 42.) Faced with this impending loss of exclusivity, Indivior, in connection with a company named MonoSol Rx, LLC ("MonoSol"), began to formulate a "Buprenorphine Generic Offensive Strategy." (Id. ¶¶ 44-45.) This strategy relied on FDA regulations that allow branded manufacturers to seek FDA approval to modify the dosage form and strength of an existing product, which would in turn change its pharmaceutical equivalence and alter the AB-rating of any proposed or available generic substitutes. (Id. ¶ 43.) The first step of the plan was to develop a new version of Suboxone which could be used to secure patent protection, while the second step was to convert the market for co-formulated buprenorphine/naloxone from Suboxone tablets to the newly-developed version of Suboxone. (Id. ¶ 45.)

2. The Creation and Marketing of Suboxone Film

In a December 2006 meeting, MonoSol and Reckitt Benckiser Healthcare UK Ltd. signed an agreement to develop and market a sublingual film form of Suboxone for the purpose of extending Indivior's exclusivity in the co-formulated buprenorphine/naloxone market. (Id. ¶ 46.) According to the Amended Complaint, MonoSol originally proposed this idea and convinced Indivior to develop the film product in partnership with MonoSol. (Id. ¶ 47.) MonoSol also negotiated with Indivior to receive royalty payments on the sales of Suboxone film. (Id. ¶ 49.)

In April 2008, MonoSol applied for a patent, which was issued as patent number 8,017,150 entitled "Polyethylene Oxide-Based Films and Drug Delivery Systems MadeTherefrom." (Id. ¶ 51.) Indivior listed the '150 patent, as well as patent numbers 8,475,832⁵ and 8,603,514 in the FDA Orange Book, and alleged that they covered Suboxone film. (Id. ¶ 52.) The earliest patent expires in 2023. (Id.)

To speed up the approval process for the new film product, MonoSol suggested that Indivior have a pre-NDA filing guidance meeting with the FDA to request a priority review status. (Id. ¶ 53.) Both MonoSol and Indivior attended the FDA meeting. (Id.) On October 28, 2008, Reckitt submitted NDA 022410 to the FDA to market the sublingual film version of Suboxone. (Id. ¶ 55.) On August 21, 2009, the FDA rejected Indivior's application due to concerns that the film could be abused by patients and result in accidental exposure to children. (Id. ¶ 57.) In response, Indivior submitted a revised Risk Evaluation and Mitigation Strategy ("REMS")⁶ to address the safety concerns related to the film form. (Id. ¶ 59.) Based on the REMS, the FDA approved Indivior's NDA for Suboxone film on August 30, 2010. (Id. ¶ 60.)

Because Suboxone film is in a different dosage form than Suboxone tablets, the two are not pharmaceutically equivalent. (Id. ¶ 56) Thus, any tablet form of generic co-formulated buprenorphine/naloxone would not be an AB-rated generic substitute for Suboxone film. (Id.) According to the Amended Complaint, however, the film offers no significant benefits for patients over the tablet and any differences between the two formulations are "clinically insignificant." (Id. ¶ 62.) Moreover, the FDA found that the film has no demonstrable safety advantage over Suboxone tablets and, in fact, expressed concerns that the film actually presents increased safety issues and potential for abuse. (Id. ¶¶ 65-67.)

According to Indivior's Suboxone Reformulation Development Plan, its "Priority I" goal was "to keep the target moving to reduce generic competition." (Id. ¶ 69.) In a March 2007 email, Indivior explained that "the current plan calls for the introduction of the film in June 2009, transitioning [patients] from the [sublingual] tabs to the film, and then withdrawing the [sublingual] tabs altogether prior to October 2009." (Id. ¶ 70.) MonoSol made the original suggestion that the withdrawal of Suboxone tablets could provide further protection from generic entry into the market, and this plan was discussed with employees of ...