A Connecticut federal judge has preliminarily approved a $146 million settlement between direct purchasers and pharmaceutical companies over the drugmakers’ role in a scheme to block generic alternatives to the stroke-prevention drug Aggrenox from coming on the market. U.S. District Judge Stefan R. Underhill found that the settlement, under which each direct buyer will receive a pro rata share of the settlement, is fair, reasonable and adequate for the purposes of preliminary approval.
If granted final approval, the settlement would resolve claims brought by direct buyers against Barr Pharmaceuticals Inc., which was acquired by Teva Pharmaceutical Industries Ltd. in 2008; Boehringer Ingelheim Pharmaceuticals Inc.; and the drugmakers’ affiliates. The direct buyers’ allegations, which were initially launched in December 2013, are only a part of a sprawling multidistrict litigation (MDL) accusing Barr Pharmaceuticals of agreeing to delay marketing its generic version of Aggrenox in exchange for a portion of Boehringer’s profits from the hit drug.
The MDL combined 11 proposed antitrust class actions and accuses Boehringer of orchestrating a $120 million pay-for-delay deal to keep generic versions of its stroke-prevention medication off the market. Boehringer received U.S. Food and Drug Administration (FDA) approval for Aggrenox in 1998, and it went on to become a success, netting $366 million in U.S. sales alone by 2008. But when Barr Pharmaceuticals allegedly sought regulatory approval in 2007 to introduce a generic version of the drug, it was promptly hit with a patent infringement suit by Boehringer.
To settle the patent infringement suit, Boehringer allegedly agreed to pay Barr Pharmaceuticals $120 million over a period of seven years and delay the introduction of a generic version of Aggrenox until 2015, according to court documents. Meanwhile, Boehringer granted Barr Pharmaceuticals a license to sell an authorized generic version of Aggrenox immediately, allegedly further suppressing the market for the generic drug.
The direct buyers – led by drug wholesalers American Sales Company LLC, Cesar Castillo Inc., Miami-Luken Inc. and Rochester Drug Co-Operative Inc. – asked the court to preliminarily approve the settlement. The direct buyers argued that certification for the purposes of settlement is warranted considering the proposed class includes at least 35 members, who are spread across 14 states and Puerto Rico. They also noted that other courts have certified similar classes in 23 other generic prescription-drug-delay cases, and certified seven for purposes of settlement.
Judge Underhill has set a final fairness hearing for Dec. 18. Class members who want to object to the proposed settlement and appear at the hearing must notify the court in advance and send a written objection summarizing their arguments.
The direct purchasers are represented by Bruce E. Gerstein, Joseph Opper, Noah Silverman and Ephraim R. Gerstein of Garwin Gerstein & Fisher LLP.
The MDL is In re: Aggrenox Antitrust Litigation, (case number 3:14-md-02516) in the U.S. District Court for the District of Connecticut.