Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Articles Posted in Drugs & Biotech
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AndroGel is a testosterone replacement therapy that generated billions of dollars in sales. The Federal Trade Commission sued under Section 13(b) of the Federal Trade Commission Act, alleging that AndroGel’s patent owners filed sham patent infringement suits against Teva and Perrigo and entered into an anticompetitive reverse-payment agreement with Teva. The FTC accused the patent owners of trying to monopolize and restrain trade over AndroGel. The District Court dismissed the FTC’s claims to the extent they relied on a reverse-payment theory but found the owners liable for monopolization on a sham-litigation theory and ordered disgorgement of $448 million in ill-gotten profits. The court denied the FTC’s request for an injunction.The Third Circuit reversed in part, holding that the district court erred by rejecting the reverse-payment theory and in concluding the owners’ litigation against Teva was a sham. The court erred by ordering disgorgement because that remedy is unavailable under Section 13(b) of the FTC Act. The court affirmed in part. The district court correctly concluded that the Perrigo litigation was a sham and that the owners had monopoly power in the relevant market but did not show the monopolization entitles the FTC to any remedy. The court did not abuse its discretion in denying injunctive relief. View "Federal Trade Commission v. AbbVie Inc" on Justia Law

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Reckitt developed Suboxone tablets, a prescription drug used to treat opioid addiction. Toward the end of its seven-year period of exclusivity in which other manufacturers could not introduce generic versions, Reckitt developed an under-the-tongue film version of Suboxone, which would enjoy its own exclusivity period. Generic versions of Suboxone tablets would not be rated as equivalent to the name-brand Suboxone film, so state substitution laws would not require pharmacists to substitute generic Suboxone tablets if a patient were prescribed Suboxone film.Purchasers filed suit, alleging that Reckitt’s transition to Suboxone film was coupled with efforts to eliminate the demand for Suboxone tablets and to coerce prescribers to prefer film in order to maintain monopoly power, in violation of the Sherman Act, 15 U.S.C. 2. The Purchasers submitted an expert report indicating that, due to Reckitt’s allegedly-anticompetitive conduct, the proposed class paid more for brand Suboxone products. The district court certified a class of “[a]ll persons or entities . . . who purchased branded Suboxone tablets directly from Reckitt” during a specified period. The Third Circuit affirmed. Common evidence exists to prove the Purchasers’ antitrust theory and the resulting injury. Although allocating the damages among class members may be necessary after judgment, such individual questions do not ordinarily preclude the use of the class action device; the court correctly found that common issues predominate. View "In re: Suboxone Antitrust Litigation" on Justia Law

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GSK’s patent to an anti-epilepsy drug, Lamictal, was to expire in 2009. Teva sought to market a generic version of Lamictal, lamotrigine, before GSK’s patent expired. Teva submitted an Abbreviated New Drug Application. GSK sued for infringement. After Teva received a favorable ruling with respect to one claim in 2005, the parties settled. Teva would begin selling lamotrigine six months before it could have had GSK won but later than if it had succeeded in litigation. GSK promised not to launch an authorized generic (AG) version of Lamictal. Had the parties not settled and had Teva succeeded in litigation, it would have been entitled to a 180-day exclusivity period as the generic first filer but GSK could have launched an AG.Companies that directly purchased Lamictal or lamotrigine (Direct Purchasers) sued, claiming the settlement violated the antitrust laws because GSK “paid” Teva to stay out of the market by promising not to launch an AG, resulting in Direct Purchasers paying more than they would have otherwise.The district court certified a class of all companies that purchased Lamictal from GSK or lamotrigine from Teva. The Third Circuit vacated. The district court certified the class without undertaking the required “rigorous” analysis, failing to resolve key factual disputes, assess competing evidence, and weigh conflicting expert testimony, all of which bear heavily on the predominance requirement, and confused injury with damages. View "In re: Lamictal Direct Purchaser Antitrust Litigation" on Justia Law

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Health benefit plans sued GSK, the manufacturer of the prescription drug Avandia, under state consumer-protection laws and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. ch. 96 (RICO), based on GSK’s marketing of Avandia as having benefits to justify its price, which was higher than the price of other drugs used to treat type-2 diabetes. The district court granted GSK summary judgment, finding that the state-law consumer-protection claims were preempted by the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. ch. 9; the Plans had failed to identify a sufficient “enterprise” for purposes of RICO; and the Plans’ arguments related to GSK’s alleged attempts to market Avandia as providing cardiovascular “benefits” were “belated.” The Third Circuit reversed, applying the Supreme Court’s 2019 "Merck" decision. The state-law consumer-protection claims are not preempted by the FDCA. The Plans should have been given the opportunity to seek discovery before summary judgment on the RICO claims. Further, from the inception of this litigation, the Plans’ claims have centered on GSK’s marketing of Avandia as providing cardiovascular benefits as compared to other forms of treatment, so the district court’s refusal to consider the Plans’ “benefits” arguments was in error because those arguments were timely raised. View "In re: Avandia Marketing, Sales and Products Liability Litigation" on Justia Law

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RDC is a direct purchaser and wholesaler of Remicade, the brand name of infliximab, a “biologic infusion drug” manufactured by J&J and used to treat inflammatory conditions such as rheumatoid arthritis and Crohn’s disease. For many years, Remicade was the only infliximab drug available. That position was threatened when the FDA began approving “biosimilars,” produced by other companies and deemed by the FDA to have no clinically meaningful differences from Remicade. RDC alleged that J&J sought to maintain Remicade’s monopoly by engaging in an anticompetitive “Biosimilar Readiness Plan,” which consisted of imposing biosimilar-exclusion contracts on insurers that either require insurers to deny coverage for biosimilars altogether or impose unreasonable preconditions governing coverage; multi-product bundling of J&J’s Remicade with other J&J drugs, biologics, and medical devices; and exclusionary agreements and bundling arrangements with healthcare providers. RDC’s own contractual relationship with J&J is limited to a 2015 Distribution Agreement, which is not alleged to be part of J&J’s Plan. The Agreement contains an arbitration clause, applicable to any claim “arising out of or relating to the Agreement. Reversing the district court, the Third Circuit held that RDC’s antitrust claims do “arise out of or relate to” the Agreement and must be referred to arbitration. View "In re: Remicade (Direct Purchaser) Antitrust Litigation" on Justia Law

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Shire manufactured and marketed the lucrative drug Vancocin, which is used to treat a life-threatening gastrointestinal infection. After Shire learned that manufacturers were considering making generic equivalents to Vancocin, it inundated the Food and Drug Administration (FDA) with allegedly meritless filings to delay approval of those generics. The FDA eventually rejected Shire’s filings and approved generic equivalents to Vancocin. The filings resulted in a high cost to consumers. Shire had delayed generic entry for years and reaped hundreds of millions of dollars in profits. Nearly five years later, after Shire had divested itself of Vancocin, the Federal Trade Commission (FTC) filed suit against Shire under Section 13(b) of the Federal Trade Commission Act, 15 U.S.C. 53(b), seeking a permanent injunction and restitution, and alleging that Shire’s petitioning was an unfair method of competition. The district court dismissed, finding that the FTC’s allegations of long-past petitioning activity failed to satisfy Section 13(b)’s requirement that Shire “is violating” or “is about to violate” the law. The Third Circuit affirmed, rejecting “the FTC’s invitation to stretch Section 13(b) beyond its clear text.” The FTC admits that Shire is not currently violating the law and did not allege that Shire is about to violate the law. View "Federal Trade Commission v. Shire ViroPharma Inc" on Justia Law

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Silver’s qui tam action, filed under the False Claims Act (FCA), 31 U.S.C. 3729–33, alleged that PharMerica, which owns and operates institutional pharmacies serving nursing homes, unlawfully discounted prices for nursing homes’ Medicare Part A patients (reimbursed by the federal government to the nursing home on a flat per-diem basis) in order to secure contracts to supply services to patients covered by Medicare Part D and Medicaid (reimbursed directly to the pharmacy by the government on a cost basis) in the same nursing homes--a practice called swapping. The district court dismissed, based on the FCA’s public disclosure bar. The Third Circuit reversed. The district court improperly determined that documents publicly describing the generalized risk of swapping in the nursing home industry served to bar his specific claim, which depended on non-public information that PharMerica was actually engaging in swapping in specific contracts. The district court also erred in concluding, on the basis of Silver’s testimony, that he relied upon certain publicly available information to reach his conclusion and that the information itself disclosed the fraud, without independently determining that the relevant public document did, in fact, effectuate such a disclosure. View "Silver v. Omnicare Inc" on Justia Law

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Shuker underwent a hip replacement surgery that resulted in unexpected complications and brought tort claims against Smith & Nephew, the manufacturer of his hip replacement system. The Medical Device Amendments of 1976, added comprehensive medical device approval processes to the Federal Food, Drug, and Cosmetic Act, prescribing tiers of federal requirements for certain devices corresponding to the device’s inherent risk level. In exchange for compliance with the strictest federal mandates, Congress afforded manufacturers express preemption from state laws imposing different or additional “safety or effectiveness” requirements for those devices, 21 U.S.C. 360k(a)(2). Shuker’s medical device was comprised of multiple components, some of which are from “Class III” medical devices subject to federal requirements and some of which are from medical devices that carry a different class designation and are not subject to those requirements. The Third Circuit affirmed a determination that Shuker’s negligence, strict liability, and breach of implied warranty claims are expressly preempted. The court reversed the dismissal of other claims. Shuker adequately pleaded non-preempted claims based on Smith & Nephew’s alleged off-label promotion in violation of federal law and loss of consortium, and jurisdictional discovery is warranted with respect to personal jurisdiction over one of the defendants. View "Shuker v. Smith & Nephew PLC" on Justia Law

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Shuker underwent a hip replacement surgery that resulted in unexpected complications and brought tort claims against Smith & Nephew, the manufacturer of his hip replacement system. The Medical Device Amendments of 1976, added comprehensive medical device approval processes to the Federal Food, Drug, and Cosmetic Act, prescribing tiers of federal requirements for certain devices corresponding to the device’s inherent risk level. In exchange for compliance with the strictest federal mandates, Congress afforded manufacturers express preemption from state laws imposing different or additional “safety or effectiveness” requirements for those devices, 21 U.S.C. 360k(a)(2). Shuker’s medical device was comprised of multiple components, some of which are from “Class III” medical devices subject to federal requirements and some of which are from medical devices that carry a different class designation and are not subject to those requirements. The Third Circuit affirmed a determination that Shuker’s negligence, strict liability, and breach of implied warranty claims are expressly preempted. The court reversed the dismissal of other claims. Shuker adequately pleaded non-preempted claims based on Smith & Nephew’s alleged off-label promotion in violation of federal law and loss of consortium, and jurisdictional discovery is warranted with respect to personal jurisdiction over one of the defendants. View "Shuker v. Smith & Nephew PLC" on Justia Law

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Defendants manufacture and distribute FDA-approved prescription eye drop medications for treating conditions such as glaucoma. Bottles are pre-packaged with a fixed volume of medication; labeling does not indicate how many doses or days of treatment a patient can extract from the bottle. The dimensions of the bottle’s dropper tip dictate the size of the drop dispensed. Scientific research indicates that a normal adult’s inferior fornix – the area between the eye and the lower eyelid – has a capacity of approximately 7-10 microliters (µLs) of fluid. If a drop exceeding that capacity is placed into an eye, excess medication is expelled, providing no pharmaceutical benefit to the patient. Expelled medication also may flow into a patient’s tear ducts and move into his bloodstream, increasing the risk of certain harmful side effects. These studies conclude that eye drops should be 5-15 µLs. Defendants’ products emit drops that are considerably larger so that at least half of every drop goes to waste. The Third Circuit reversed dismissal of a putative class action (Class Action Fairness Act, 28 U.S.C. 1332) under state consumer protection statutes. The consumers’ allegations of injury were sufficient to confer standing. Plaintiffs claim economic interests in the money they spent on medication that was impossible for them to use; their concrete and particularized injury claims fit comfortably in categories of “legally protected interests” readily recognized by federal courts. View "Cottrell v. Alcon Laboratories" on Justia Law