U.S. District Judge Jan E. DuBois, a Pennsylvania federal judge, has folded Rite Aid Corp.’s pay-for-delay lawsuit against AbbVie Inc. and Teva Pharmaceuticals Industries Ltd. over Niaspan generics into the related multidistrict litigation (MDL) that is pending in the judge’s court. This is the 19th antitrust action now pending in the MDL. Rite Aid’s lawsuit joins actions by four other direct purchasers of the cholesterol drug. Rite Aid, along with 14 end-payors, contends that AbbVie and Teva made millions for illegally delaying the entry of Niaspan generics into the market as part of a collusion with the drug’s maker, Kos Pharmaceuticals.
Rite Aid’s suit, filed on April 14, says that while the first of multiple would-be generic competitors started applying to market generic versions of the cholesterol drug in October 2001, no such competitor entered the market until almost 12 years later. In addition to Rite Aid, the direct purchasers in the MDL are Professional Drug Company Inc., Rochester Drug Co-Operative Inc.,Value Drug Co. and Walgreen Co., according to the order signed by Judge DuBois. The 14 end-payors comprise mostly unions. Rite Aid claims Niaspan purchasers were harmed by the alleged unreasonable restraint of trade by Kos and its successors Abbott Laboratories and AbbVie, along with Barr Pharmaceuticals Inc. successor Teva.
It’s alleged that Kos paid Barr to stay off the market for eight years in exchange for “hundred of millions of dollars,” delaying competition of generic extended release niacin until about September 2013. Rite Aid is the latest direct purchaser, following Walgreen Co., to join the MDL. In late March, Walgreen Co.’s nearly identical antitrust suit against AbbVie, Abbott, Teva, Barr and others was consolidated by court order with the other direct purchaser actions.
The MDL stems from a 2005 settlement between Kos, purchased by AbbVie’s previous incarnation in 2006, and Barr, which was bought by Teva in 2008. The pay-for-delay deal is said to have resulted from litigation brought by Kos against Barr over purported infringement of its Niaspan patents. It came just before the U.S. Food and Drug Association gave Barr approval to market Niaspan generics. The settlement included a co-promotion deal that required marketing the drug to doctors specializing in women’s health in exchange for royalties and allowed Barr to serve as a backup manufacturer for Niaspan in exchange for quarterly standby payments. Class actions against Teva and AbbVie over the purported “sham” patent settlement began in April 2013.
In September, Judge DuBois dismissed a number of state law claims from the MDL, but kept the Plaintiffs’ federal antitrust claims intact. Ruling on the Defendants’ bid to dismiss two consolidated complaints brought by direct purchaser and end-payor Plaintiffs, the judge found that the end-payors lacked standing to bring claims under laws from 13 states and D.C., because they had not alleged that any Plaintiff lived in those states or D.C. However, Judge DuBois refused to dismiss two federal antitrust claims brought by direct purchasers under the Sherman Act, finding that the claims were not time-barred. That was because ongoing sales of Niaspan at a “supracompetitive price” constitute a continuing violation.