A suit accusing Wyeth Inc. and Teva Pharmaceuticals of scheming to inflate the price of antidepressant Effexor XR, which already ascended once to the Third Circuit, remains largely intact on remand after a federal judge in New Jersey ruled on a series of defense motions to dismiss.
U.S. District Judge Peter Sheridan denied a motion to dismiss the case in its entirety. He granted several motions to dismiss various state-law claims, but most of those claims were dismissed without prejudice, allowing plaintiffs a chance to correct various deficiencies in their pleadings.
The ruling came in a suit filed on behalf of a putative class made up of labor unions, insurance companies and other indirect purchasers who say they are charged more for Effexor XR due to various anti-competitive tactics by Wyeth, which is a subsidiary of Pfizer, and Teva. The plaintiffs claim Pfizer entered into an unlawful, “pay for delay” deal with Teva in 2005 concerning the timing of a generic version of Effexor XR. The suit also claims the defendants fraudulently obtained three patents for Effexor XR from the U.S. Patent and Trademark Office, then engaged in sham litigation over those patents.
Teva and Wyeth agreed in October 2005 to settle a patent infringement suit under terms calling for Teva to pay royalties to Wyeth for its generic Effexor and postpone that product’s introduction date.
In October 2014, Sheridan granted a motion for partial dismissal of the Effexor antitrust litigation. The plaintiffs appealed, and the Third Circuit concluded that the plaintiffs plausibly pleaded an unlawful reverse-payment settlement agreement. The appeals court ruling—in the Effexor case and a similar suit against Pfizer and Ranbaxy over cholesterol-reducing drug Lipitor—applied the U.S. Supreme Court’s 2013 ruling in Federal Trade Commission v. Actavis, which held that payments from patent holders to infringers through reverse-payment settlement agreements are subject to antitrust scrutiny.
In the Effexor XR case, Sheridan denied motions by Wyeth and Teva to dismiss the case in its entirety based on federal pre-emption principles.
Sheridan also rejected a defense motion to find antitrust claims from Kansas, Mississippi, Montana and Tennessee, and consumer claims in Illinois, New York, and Tennessee were barred under those states’ statutes of limitations.
He also denied a defense motion for judgment on the pleadings as to state consumer protection law claims from California, Nevada, New Mexico, New York and North Carolina.
Three other defense motions for judgment on the pleadings in the case were granted without prejudice, allowing the plaintiffs to amend to plead compliance with notice provisions contained in the antitrust laws of Arizona, Nevada, and Utah, and to include a named plaintiff from Utah.
A motion for judgment on the pleadings for antitrust claims based on the laws of the District of Columbia was likewise granted without prejudice. Sheridan found that the plaintiffs lack Article III standing to bring claims in the district because no plaintiff lives in Washington, or made purchases or reimbursements there. In addition, Sheridan rejected the plaintiffs’ claim that they can assert claims in any state because they have Article III standing in some states.
Sheridan also granted Wyeth and Teva’s motion for judgment on the pleadings, without prejudice, in connection with notice requirements in Massachusetts and West Virginia’s consumer protection laws, as well as other deficiencies for claims in connection with Tennessee and Rhode Island laws.
Some defense motions for judgment on the pleadings were granted with prejudice: antitrust claims from Illinois and Rhode Island, and consumer protection claims from Illinois and Maine.
Also granted with prejudice was a motion to dismiss one count based on Kansas, New York and Tennessee law to the extent those claims are predicated on unilateral activity by Wyeth.
The plaintiffs were given 30 days to file an amended complaint.
Sally Beatty, a spokeswoman for Pfizer, issued a statement about the ruling: “We will continue to defend ourselves vigorously against the remaining claims, which we believe are without merit. The procurement and enforcement of our patents—including settlements our subsidiary Wyeth agreed to that permitted generic competitors to enter the market before patents expired—were proper, lawful and in line with the Supreme Court’s decision in FTC v. Actavis.”
“We will continue to vigorously protect and defend our intellectual property, which is vital to developing new medicines that save and enhance patient lives. Effexor XR represents an important innovation in treatment and has benefited millions of patients across the country,” the Pfizer statement added.
Pfizer is represented by attorneys from White & Case and Paul, Weiss, Rifkind, Wharton & Garrison.
Newark attorney Michael Patunas, and Jay Lefkowitz of Kirkland & Ellis in New York, representing Teva, didn’t return calls about the case. Neither did a Teva spokeswoman.
James Cecchi of Carella, Byrne, Cecchi, Olstein, Brody & Agnello, for the plaintiffs, also didn’t return a call.