Big Pharma Can’t Dodge Union’s Healthcare Suit

     SAN FRANCISCO (CN) – An antitrust fight continues after a federal judge denied pharmaceutical companies’ motion to dismiss a union health plan’s complaints over a patent settlement that delayed availability of a generic version of Lidoderm.
     U.S. District Judge William Orrick on Friday struck claims for injunctive relief, with leave to amend, but denied all other motions to dismiss complaints against several pharmaceutical companies.
     The multidistrict litigation is headed for class action status, but Orrick’s order applies only to what he calls the Walgreen plaintiffs.
     The United Food and Commercial Workers Local 1776 says the settlement violated federal antitrust laws because it delayed release of the generic version of Lidoderm, a topical antiseptic used to treat painful skin conditions, such as shingles. The UFCW healthcare plan, which Orrick refers to as “the Walgreen plaintiffs,” seeks injunctive relief and damages for the impact on its healthcare plans.
     Defendant Teikoku Pharma USA, et al., sought dismissal due to likely approval of class action certification, saying they would face a “multiplicity of suits” that would cause administrative problems.
     Orrick agreed. “All relevant cases, claims and parties are joined in this multidistrict litigation lawsuit,” the judge wrote. “I see no reason why this case cannot be managed in a way to avoid the problems in administration and multiplicity of suits cited by the defendants.”
     The union called the settlement an unreasonable restraint on trade, a conspiracy to “expand monopoly power” by delaying the availability of generic Lidoderm, excluding competitors and charging inflated prices for the drug.
     Teikoku Pharma countered that the union is an indirect buyer of Lidoderm, and that the only valid claims would be from direct buyers of the drug. It also challenged the validity of wholesale drug distributors’ assignments of their claims to the union.
     The Walgreen plaintiffs “do not contend that they are entitled to treble damages,” Orrick wrote. “Instead, they assert standing as indirect purchasers” and seek injunctive relief.
     Yet, they “have failed to show a ‘threatened loss or injury'” and the “anticompetitive conduct ended on Sept. 15, 2013, when generic drug competitors were able to enter the market,” Orrick found.
     The judge said the Walgreen plaintiffs “have not adequately pleaded that they are entitled to injunctive relief,” but “(t)he assignments of the right to bring antitrust claims are valid and the partial assignment of claims does not require me to dismiss or stay the Walgreen plaintiffs’ claims at this stage,” Orrick wrote.
     Because they are indirect purchasers, Orrick struck the union’s claims for injunctive relief but denied all other motions to dismiss.
     Defendants include Endo Pharmaceuticals, Teikoku Seiyaku, Watson Pharmaceuticals, Actavis and Watson Laboratories.

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