26 January 2015Americas

First Circuit upholds class certification in Nexium anti-competition case

The US Court of Appeals for the First Circuit has upheld class certification in the Nexium (esomeprazole magnesium) pay-for-delay case.

A class certification allowed, in this case, a number of patient interest companies and individuals to sue Nexium maker AstraZeneca and three generic drug companies as a group.

In a 2-1 decision on Wednesday (January 21), the court concluded that class certification is permissible “even if the class includes a de minimis number of uninjured parties”. It added that the referring court, the US District Court for the District of Massachusetts, did not abuse its discretion by certifying the class.

The case was brought by United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund (‘the Fund’), and other unnamed companies, against AstraZeneca and generic drug companies Ranbaxy, Teva and Dr Reddy’s Laboratories.

The Fund is a union health and welfare fund that reimburses its members for prescription drugs including Nexium, a heartburn drug.

Before the case, AstraZeneca had sued the three generic drug makers, which were seeking to make their own versions of Nexium, for patent infringement.

That case was settled with AstraZeneca paying the generic companies “significant sums”, or so-called reverse payments, in exchange for the companies not challenging the Nexium patents’ validity and for delaying the launch of their generic products until the drug’s main patents expired on May 27, 2014.

In its own complaint, the Fund had argued that the Nexium patents are invalid for obviousness. The European Patent Office and Canadian courts have previously held that the European and Canadian patents covering the drug are invalid.

The Fund had added that the settlements between AstraZeneca and the generic companies were unlawful and anti-competitive because of “the likely invalidity of the Nexium patents, the size of AstraZeneca’s payments to the generic defendants, and the fact that the generic defendants provided nothing to AstraZeneca other than an agreement not to compete.”

It said that if these agreements had not been in place, a generic version of Nexium would have been available as early as April 2008, and argued that AstraZeneca had overcharged for Nexium from that date to at least May 27, 2014.

The Fund asked for damages under anti-competition and consumer protection laws, and sought class certification for those who had paid for the drug during the six-year period from 2008. The district court granted the class certification in November 2013.

On appeal, First Circuit Judge Juan Torruella and Federal Circuit Judge Timothy Dyk upheld the lower court’s decision, while First Circuit Judge Kayatta dissented.

Neither AstraZeneca nor the Fund replied to LSIPR’s requests for comment.

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