Days after approving a $150 million class action settlement between direct purchasers of nasal spray Flonase and manufacturer GlaxoSmithKline, a federal judge has approved a $35 million settlement between GSK and the indirect purchasers of the drug.
In approving the $35 million settlement in In re Flonase Antitrust Litigation, U.S. District Senior Judge Anita B. Brody of the Eastern District of Pennsylvania also awarded nearly $11.7 million in attorney fees and $1.85 million in expenses to the plaintiffs' class counsel. Fifteen firms worked on the case with lead counsel Miller Law and Pomerantz Grossman Hufford Dahlstrom & Gross logging the majority of the 37,762 hours worked over the nearly five years of litigation.
The settlement was reached in January and Brody gave her preliminary approval at that time. GSK had also agreed at that time to an $11 million settlement with another class of indirect purchasers, large health insurers, according to Brody's opinion.
The indirect purchaser class involved in the $35 million settlement included lead plaintiffs A.F. of L.-A.G.C. Building Trades Welfare Plan, IBEW-NECA Local 505 Health & Welfare Plan, Painters District Council No. 30 Health & Welfare Fund and Andrea Kehoe. They alleged GSK filed sham citizen petitions with the U.S. Food and Drug Administration to delay entry of a cheaper, generic version of Flonase to the market. That, they argued, resulted in the indirect purchasers class being overcharged for the nasal spray, according to the opinion.
In 2011, Brody had denied two GSK motions for summary judgment on causation and on Noerr-Pennington immunity, which immunizes private entities from liability under antitrust laws. The case was slated for trial in early 2013.
In her opinion approving the settlement, Brody said the case involved complex scientific, regulatory and legal issues that presented a number of obstacles for the plaintiffs to succeed at trial. Brody said there were two "particularly difficult propositions" the plaintiffs would have to face: proving that GSK's petitions to the FDA were objectively baseless and, "most crucially," that the petitions were a substantial cause of any delay in approval of generic versions of the drug.
"After facilitating these extensive settlement negotiations, I can attest to the challenges plaintiffs would have faced in establishing the amount of their damages," Brody said. "Given the complexity of these issues, there is no guarantee that a jury would have found GSK liable, or how the jury would have responded to the complicated economic data necessary to show damages."
In approving the class counsel's petition for attorney fees, Brody noted the request of $11.65 million was actually less than the lodestar amount would come out to when looking at the hours they worked times their hourly rates.
The $11.65 million equals one-third of the $35 million settlement. Brody said the 15 firms charged different amounts based on their average billable rates and the individual attorney or staff member working on the assignment. She said each firm's average billable rate ranged from $275 to $750 an hour.
When multiplying the number of hours times the various hourly rates, Brody said the class counsel racked up nearly $17.3 million in fees. The fact that the percentage fee award of $11.65 million is less than the regular billing rates "underscores the risk counsel accepted to prosecute this case to trial," Brody said.
Brody also approved the nearly $1.85 million in expenses in full. She reduced the request for incentive awards for class representatives from, in most cases, $25,000 per plaintiff to $10,000. Individual class representative Kehoe's award was reduced from $10,000 to $5,000.
A number of attorneys from Ballard Spahr represented GSK in the litigation.
Last week, Brody approved a $150 million settlement between GSK and the 33-member direct purchaser class over similar allegations the drugmaker monopolized the market for Flonase. As part of that settlement, the judge also awarded $50 million in attorney fees.
GSK had earlier agreed to settle for $11 million claims from more than 30 large, commercial health insurers. Those insurers have agreed to give $1 million of their recovery in fees to the indirect purchaser class action counsel for "having created the benefits to be received by the SHPs (settling health plans) and/or under certain conditions for payment to the settlement class."
(Copies of the 24-page opinion in Medical Mutual of Ohio v. SmithKline Beecham, PICS No. 13-1364, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •