Generic Drug Antitrust Litigation Clears Standing Hurdle
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A federal judge has rejected standing challenges brought by numerous pharmaceutical companies in an attempt to dismiss several antitrust and consumer protection class action claims leveled by entities that either purchased or resold generic drugs at allegedly inflated prices.
The defendants, which consist of 25 pharmaceutical companies, had argued that plaintiffs did not have standing to bring claims based on state laws in jurisdictions where the class representatives did not either purchase or resell the drugs at issue. Specifically, the defendants contended the plaintiffs did not have Article III standing to bring the claims.
U.S. District Judge Cynthia Rufe of the Eastern District of Pennsylvania, in her 48-page decision from Feb. 15, said the U.S. Court of Appeals for the Third Circuit "has not definitively answered" the question of how courts should balance the interplay between Article III standing and class standing. However, Rufe said the plaintiffs' allegations showed a "substantial and shared interest" in proving the alleged misconduct in the states outlined in the complaints.
"Because the state law claims of the named Group 1 end-payer and indirect-reseller plaintiffs largely parallel those of the putative class members, it is both proper and more efficient to consider whether they may pursue their claims on behalf of the unnamed class members in the context of the class certification analysis required under Rule 23 of the Federal Rules of Civil Procedure," Rufe said.
The ruling, however, also trimmed numerous state law claims from the complaint, finding that all or parts of the plaintiffs claims were barred under under the antitrust, deceptive trade practices and consumer protection laws in five states.
The consolidated multidistrict litigation In re Generic Pharmaceuticals Pricing Antitrust Litigation stems from a wide-ranging federal probe that in 2016 led two pharmaceutical executives to plead guilty to price-fixing charges.
Rufe's ruling addressed claims brought against a group of defendants made up of 25 pharmaceutical companies incorporated in a handful of states, including Pennsylvania, Florida, New Jersey, Delaware and New York.
The group of plaintiffs that Rufe's ruling addressed included 23 end-payers, which included welfare benefit funds, labor unions, private insurers and others, as well as six indirect resellers, all of which were independent pharmacies. The group of plaintiffs brought antitrust, consumer protection and unjust enrichment claims in nearly all 50 states and several U.S. territories.
The claims are related to the alleged price-fixing of generic drugs between 2012 and the present, which was the subject of a federal investigation into the industry. That probe eventually led Jeffrey Glazer and Jason Malek, both former executives at Heritage Pharmaceuticals, to plead guilty to conspiring to manipulate drug prices.
In broad terms, the cases all stem from claims that, between 2012 and 2015, the average market price for the generic drug at issue significantly increased in ways that corresponded with meetings of trade associations, particularly the Generic Pharmaceutical Association.
Attorneys Dianne Nast of Nast Law and Roberta Liebenberg of Fine, Kaplan and Black are lead attorneys representing the plaintiffs, and Pepper Hamilton attorney Jan Levine is lead counsel for the defense. None of the attorneys returned a call seeking comment.
