In Re Wellbutrin XL Antitrust Litigation Indirect Purchaser Class
868 F.3d 132 (2017)
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Rule of Law:
To establish antitrust standing, a plaintiff must prove its injury was caused by the defendant's anticompetitive act. This causal link is broken, and standing is absent, if an independent legal barrier, such as a valid third-party patent, would have prevented the plaintiff from benefiting from competition even in the absence of the challenged act.
Facts:
- GlaxoSmithKline (GSK), in partnership with Biovail, marketed the extended-release antidepressant Wellbutrin XL, for which Biovail held the primary patent.
- A separate company, Andrx Pharmaceuticals, LLC, held its own patent ('708 patent) covering an extended-release formulation of the same active ingredient.
- Between 2004 and 2005, four generic manufacturers, including Anchen Pharmaceuticals, Inc., filed Abbreviated New Drug Applications (ANDAs) to market generic Wellbutrin XL, certifying their products would not infringe Biovail's patents.
- Anchen was the first to file, entitling it to a 180-day market exclusivity period upon launch.
- Biovail filed patent infringement lawsuits against the four generic manufacturers; GSK joined the suits against Anchen and Abrika.
- Andrx also filed an infringement suit against both GSK and Anchen, alleging their products infringed its '708 patent.
- In February 2007, GSK, Biovail, Anchen, and Andrx, among others, entered into a complex settlement.
- As part of the settlement, GSK provided a 'no-AG agreement' (a promise not to launch an authorized generic), and in exchange, Anchen agreed to delay the launch of its 150 mg generic product until May 2008.
Procedural Posture:
- Direct and indirect purchasers filed putative class action lawsuits against GSK and Biovail in the U.S. District Court, alleging federal and state antitrust violations.
- Biovail entered into a settlement agreement with both plaintiff classes in November 2012 and was dismissed from the case.
- The District Court granted summary judgment in favor of GSK on the Appellants' claims of sham litigation and sham petitioning.
- Following the Supreme Court's decision in FTC v. Actavis, Inc., the District Court granted summary judgment for GSK on the reverse payment settlement claims.
- The District Court also issued rulings on class certification, including decertifying the indirect-purchaser class.
- The direct and indirect purchasers (Appellants) appealed the District Court's grants of summary judgment to the U.S. Court of Appeals for the Third Circuit.
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Issue:
Does a plaintiff have antitrust standing to challenge a reverse payment settlement agreement when a separate, valid patent, not resolved by the settlement, would have independently blocked the generic competitor's market entry, thereby breaking the causal chain between the settlement and the plaintiff's alleged injury?
Opinions:
Majority - Jordan, Circuit Judge.
No. A plaintiff lacks antitrust standing to challenge a reverse payment settlement agreement if an independent legal barrier, such as a blocking patent held by a third party, would have prevented the generic's market entry regardless of the settlement. In such cases, the plaintiff's injury—higher drug prices—is caused by the blocking patent, not the settlement agreement, failing the causation element required for an antitrust injury. The court reasoned that to establish antitrust standing, the Appellants must prove the settlement caused their injury. However, Andrx's '708 patent constituted an independent and formidable barrier to Anchen's market entry. The Appellants failed to produce sufficient evidence that Anchen would have either secured a license from Andrx or prevailed in the patent litigation against Andrx. Expert testimony, which was unrebutted, suggested Andrx had an 80% chance of winning the infringement suit, particularly because the doctrine of assignor estoppel would likely have prevented Anchen from challenging the patent's validity. Because the Andrx patent would have legally blocked Anchen's launch, the settlement was not the cause of the delay in generic competition, and thus the Appellants cannot demonstrate the necessary antitrust injury for standing.
Analysis:
This decision significantly clarifies the causation requirement for antitrust standing in pharmaceutical 'pay-for-delay' cases under FTC v. Actavis. It establishes that plaintiffs cannot simply show a settlement delayed a generic launch; they must also prove the generic could have lawfully launched but for the settlement. The ruling highlights the importance of the entire patent landscape, demonstrating that a single 'blocking patent' held by a third party can be dispositive in defeating an antitrust claim. This creates a higher evidentiary bar for plaintiffs, who must now effectively address the merits of other potential patent disputes to establish the causation element of their antitrust injury.
