While lawyers for Merck & Co. and Upsher-Smith Laboratories wait to find out whether the U.S. Supreme Court will hear a crucial challenge over a so-called pay-for-delay deal involving the potassium supplement K-Dur, other pharma companies have been busy trying to convince judges to put their own cases on ice. Mostly, they’ve succeeded.
The latest litigation freeze came when U.S. District Judge Joel Pisano in Trenton, New Jersey, agreed to stay a sprawling consolidated antitrust case against Pfizer Inc.’s Wyeth unit and generic drug manufacturer Teva Pharmaceuticals Industries.
The plaintiffs, two proposed classes and a group of pharmacies including Rite Aid and Walgreens, accuse Wyeth of conspiring with Teva to unlawfully extend Wyeth’s monopoly on sales of the antidepressant Effexor. As in other pay-for-delay or “reverse payment” settlement cases, the drug companies had reached a deal in patent litigation that included delaying the marketing of a generic version of Effexor.
Peter Pearlman of Cohn, Lifland Pearlman Herrmann & Knopf, liaison counsel for direct purchasers of Effexor, argued in a motion opposing the stay that any ruling in the K-Dur case before the Supreme Court wouldn’t resolve the issues in the New Jersey litigation, and putting the case on hold would be unfair.
But Pisano concluded last week that the stay would “allow for the potential simplification the issues in this case and promote judicial economy, as a Supreme Court decision may clarify the standard that, according to plaintiffs, governs their reverse payment theories of recovery.”
Pearlman did not respond to a request for comment.
Robert Milne of White & Case represents Wyeth along with Liza Walsh of Connell Foley; Walsh also wasn’t available by deadline.
Jay Lefkowitz of Kirkland & Ellis, who represents Teva, declined to comment because he’s involved in the case that could wind up before the Supreme Court.
In July, the U.S. Court of Appeals for the Third Circuit became the first appellate court to side with plaintiffs in nationwide suits over pay-for-delay deals, finding the agreements can be treated as “prima facie evidence of an unreasonable restraint of trade.”
Until then, the Federal Trade Commission and private plaintiffs had run up against a standard articulated by the Eleventh Circuit in 2005 when it set aside an FTC order blocking the same K-Dur deal that’s at issue before the Supreme Court. The Eleventh Circuit ruled that if the agreement didn’t extend restrictions on competition beyond the reach of a drug company’s patent rights, the deal passed antitrust muster.
In August, Merck, represented by Williams & Connolly’s Kannon Shanmugam, and Upsher-Smith Laboratories, represented by Kirkland & Ellis’s Lefkowtiz, challenged that decision with separate cert petitions to the Supreme Court.
Since then, defendants have managed to temporarily halt a series of pay-for-delay cases in federal courts across the country. In addition to Tuesday’s decision in the Effexor case, litigation over Modafinil in Philadelphia has been delayed, as have suits over Lipitor in New Jersey, Cipro in California and Nexium in Pennsylvania, New Jersey and Massachusetts.
The only exception appears to be a federal suit in New Jersey filed by private purchasers of GlaxoSmithKline’s Lamictal, which treats epilepsy and bipolar disorder, over a deal struck with Teva that delayed the launch of a generic alternative.
U.S. District Judge William Walls in Newark ruled Tuesday that the defendants’ prediction that the Supreme Court could grant cert and issue a decision by June 2013 is “wildly optimistic” and refused to stay the case.