Plaintiffs push for class certification in Solodyn reverse-payment cases

White Pill Bottle

14 September 2017. By Leah Nylen.

A group of 48 companies that directly bought acne drug Solodyn and a separate group of insurers and consumers who paid for the drug urged a Massachusetts federal judge to certify the two groups to pursue an antitrust class actions against Medicis Pharmaceuticals and Impax.

Thomas Sobol, a lawyer for the 48 companies who are seeking to pursue a class action of direct purchasers, told US District Judge Denise Casper that it would be too difficult for the companies to pursue individual cases against the drugmakers.

"It's just going to be an absolute impracticality," Sobol said a hearing in federal court Thursday. "Almost all the witnesses would have the same testimony in an individual case and a class case."

The two groups of plaintiffs alleged that Medicis paid Impax to delay entry of a generic version of Solodyn, an antibiotic frequently used to treat acne. At the same time, Medicis introduced different dosages of its drug and moved patients onto those versions, which had patent protection for a longer period of time, effectively eroding the customer base for potential generics.

The US Federal Trade Commission, one of the US's two antitrust agencies, investigated the companies for potentially anticompetitive conduct, but closed its probe in December 2015 without taking action.

Sobol, who represented plaintiffs in a similar antitrust class action involving the drug Nexium, said that case cost $3.7 million to prosecute. Many of the class members in the direct purchaser class have claims smaller than that amount, meaning they would have little incentive to pursue an individual case.

Steve Shadowen, an attorney for a class of consumers and health insurers, also pointed to the Nexium case as a roadmap for Casper in considering class certification for the end-payor class. In Nexium, the US Court of Appeals for the First Circuit upheld a class certification decision of an end-payor class.

"Just about everything the court needs to do is right here in the Nexium decision," Shadowen said.

Lawyers for the drug companies, however, said that "real world data" show that drug buyers weren't harmed by the alleged anticompetitive agreement, and that plaintiffs failed to show how they would distinguish between buyers who were allegedly harmed and those who were uninjured.

James Carroll, a lawyer for Medicis, said the Solodyn case wasn't a typical reverse-payment case — where a branded drugmaker pays a generic to stay off the market — because three generics tried to enter the market for Solodyn in 2009 and 2010 before eventually pulling their products from the market.

Those generics didn't gain a foothold in part because Medicis began an aggressive couponing program that offered the product to consumers without a co-pay and because of the introduction of the additional dosages, Carroll said.

"This is real world data that doesn't exist in Nexium or any of those other cases," Carroll said, later calling it "real world, factual evidence that affected the behavior in this case."

When those generics came on the market, some of the direct purchasers didn't even switch to the generic, Carroll said, calling into question whether they were harmed by the alleged agreement that delayed Impax's generic version.

Casper, however, seemed skeptical of that argument, saying that it "didn't hit me that not all class members bought who would have in the but-for world" without the agreement.

Doug Baldridge, a lawyer for Impax, said the Solodyn case "materially detours" from Nexium because of the generic entry in 2009 and 2010. He also said that defendants had calculated that as many as 50 percent of the individuals in the proposed end-payor class were uninjured.

In the Nexium case, the appeals court said the end-payor class could be certified because the number of uninjured class members was "de minimis." Baldridge said that 50 percent couldn't be considered de minimis.

The plaintiffs also hadn't proposed a way to determine which individuals who bought Solodyn would have switched to the generic, essentially which consumers were injured versus uninjured, he said.

"There is no mechanism," Baldridge said. "There simply is no mechanism that will show they can identify injured versus uninjured" individuals.

In rebuttal, both Sobol and Shadowen said the assertions by the defendants about the effect of generic entry and the numbers of uninjured class members were factual issues that should be sorted out at trial, not class certification.

"That's a symptom of the reverse-payment agreement," Sobol said of the ineffective entry of generics in 2009 and 2010. "Their conduct prevented...products from being absorbed by the marketplace."

Casper took the issue under advisement but didn't indicate when she would issue a ruling.

	Eliot Gao