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27 September 2013Americas

Judge denies AstraZeneca’s bid to squash pay-for-delay challenge

A federal judge has denied AstraZeneca’s motions to dismiss claims challenging its pay-for-delay deals with three generic pharmaceutical companies in connection to heartburn drug Nexium.

The decision comes a few months after the  FTC v Actavis ruling, where the Supreme Court found that regulators may challenge pay-for-delay arrangements, also known as reverse payment patent settlements, on antitrust grounds.

A group of direct and indirect purchasers of the drug brought an action against AstraZeneca and generic makers Ranbaxy, Teva and Dr. Reddy’s for alleged violations of antitrust laws.

In a civil action dated September 11, Judge William Young of the US District Court for the District of Massachusetts wrote that the court denies the defendant’s motion as the plaintiffs “seek to challenge continuing harms flowing from the AstraZeneca/Ranbaxy agreement.”

A spokesperson for AstraZeneca told LSIPR: “AstraZeneca disagrees with the court’s decision. We are confident that our agreements are lawful and will be found lawful under application of the correct legal standard and law.”

In 2005, Ranbaxy gave AstraZeneca notice that it had filed an Abbreviated New Drug Application (ANDA) to market a generic version of Nexium. In its application, it included a Paragraph IV certification that stated that any commercial manufacture use or sale of a generic Nexium product would not infringe AstraZeneca’s patents.

Generic drugmakers Teva and Dr. Reddy’s also filed ANDAs to make the same drug.

In April 2008, AstraZeneca and Ranbaxy settled the patent litigation, and Ranbaxy agreed to delay the launch of the generic Nexium until May 2014.

AstraZeneca also settled with Teva and Dr. Reddy’s, both of which started making generic versions of Nexium “at risk” and agreed to delay launch of their products until May 2014.

Jennifer Driscoll-Chippendale, partner at Sheppard Mullin Richter & Hampton LLP in Washington DC, said that it was too soon to tell whether this development will have an impact on future pharmaceutical patent cases.

“What was interesting about this case is that there was no direct reverse payment; it hinged on the exclusive dealing arrangements that were made.

“It’s up to the district court to decide how broadly or narrowly to interpret what constitutes a reverse payment,” she said, adding that the definition of reverse payments is nebulous and can be interpreted in different ways by different courts.

That the new pay-for-delay provision is being applied to the case retrospectively does not place the plaintiffs in a weaker position, she continued: “The case was originally decided in favour of the plaintiffs, and now the court has revisited the Supreme Court ruling and said ‘our decision was indeed correct, even under the Supreme Court precedent’.”

She said that the parties may now pursue one of two tracks: “There is the option of the discovery of documents and depositions of witnesses, or trying to negotiate to reach an agreement that is not going to run afoul of the court’s ruling to the extent that’s possible.”


More on this story

Americas
17 June 2013   A majority of the US Supreme Court has ruled that the US Federal Trade Commission should be able to challenge so-called ‘pay-for-delay’ patent litigation settlements on antitrust grounds.
Americas
8 December 2014   A US court has spared drug companies AstraZeneca and Ranbaxy Laboratories a potentially hefty fine after ruling that a ‘pay-for-delay’ deal between them did not violate antitrust grounds.

More on this story

Americas
17 June 2013   A majority of the US Supreme Court has ruled that the US Federal Trade Commission should be able to challenge so-called ‘pay-for-delay’ patent litigation settlements on antitrust grounds.
Americas
8 December 2014   A US court has spared drug companies AstraZeneca and Ranbaxy Laboratories a potentially hefty fine after ruling that a ‘pay-for-delay’ deal between them did not violate antitrust grounds.