Class action filed relating to delayed generic drug to replace Lidoderm

November 26, 2013 by

bouton croixEndo Pharmaceuticals and Actavis Inc. have been sued in two putative class actions in Pennsylvania and California federal courts over their patent settlement that allegedly delayed generic competition for Endo’s pain relief patch Lidoderm.

Puerto Rican pharmaceutical wholesaler Drogueria Betances launched its antitrust class action Friday in Pennsylvania, and a union health and welfare fund filed a similar complaint Tuesday in California, both alleging that Endo, Actavis and their subsidiaries unlawfully restricted Lidoderm competition with their so-called pay-for-delay deal. That agreement harmed consumers and caused them to pay higher prices for the pain patches, the complaints claimed.

Actavis initially submitted an abbreviated new drug application with the U.S. Food and Drug Administration to market a generic version of the lidocaine pain patch in November 2009, but Endo subsequently sued it for patent infringement, according to the complaints.

Although Actavis could have entered the market with its generic as early as August 2012, it agreed to hold off until September 2013, giving Endo an additional year of monopoly power for Lidoderm and approximately $1.3 billion in sales, Betances claimed.

In exchange, Betances alleges Actavis received between $96 million and $240 million of free, branded Lidoderm product from Endo to sell, which amounted to sharing Endo’s monopoly profits.

“In this context, there was no difference between Endo giving Actavis a check for millions of dollars versus Endo giving Actavis millions of dollars in free product that Actavis (through its wholly owned and controlled subsidiaries) could resell at the fully branded price,” Betances’ complaint said. “This was the functional equivalent of Endo and Actavis unlawfully sharing monopoly profits because Endo gave Actavis a share of the monopoly product volume to sell at monopoly prices, which it did.”

While Betances seeks to represent all Lidoderm purchasers from August 2012 until the anti-competitive effects of Endo’s and Actavis’ deal abate, the union wants to represent end payors who indirectly purchased or paid for Lidoderm starting in May 2012 — when the companies reached their settlement deal.

“But for defendants’ anticompetitive scheme, in whole or in part, one or more generic versions of Lidoderm would have been marketed in the United States as early as May 2012,” the union’s complaint said. “Thus, absent defendants’ anticompetitive scheme, in whole or in part, plaintiff and the members of the class would have already been able to satisfy their lidocaine patch 5 percent requirements at significantly lower prices, rather than being forced to pay for branded Lidoderm at higher prices because of the illegal scheme.”

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

Legal Disclaimer

The information contained in this blog does not constitute legal advice, and does not create an attorney-client relationship. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this blog.