Judge gives initial approval to Actavis $20m antitrust deal
A Massachusetts judge has provided her preliminary approval to a $19.9 million settlement in a class action antitrust suit brought against pharmaceutical company Actavis.
Alongside biotech company Shire, Actavis had been sued in January 2017 by Rochester Drug Co-operative, which had accused the pair of entering into an unlawful reverse payment agreement in April 2013.
According to the co-operative, a wholesaler serving community retail pharmacy and home healthcare dealers, Actavis had allegedly agreed to delay marketing its less expensive, generic version of Shire’s ADHD drug Intuniv (guanfacine hydrochloride) until December 2014, in return for payment.
In 2013, as part of a patent settlement agreement between Actavis and Shire, Actavis agreed to provide Shire with a 25% portion of Actavis’s gross profits during the 180-day exclusivity period.
“By paying Actavis to delay its launch using the no-AG [authorised generic] promise … Shire was able to continue to reap monopoly profits on branded Intuniv until December 1, 2014,” said the suit.
The Rochester Drug Co-operative case was subsequently merged with other litigation against Shire and Actavis, with the cooperative and FWK Holdings (the assignee of the claims of wholesaler Frank W Kerr Co) forming the direct purchaser class.
Then, in August this year, Actavis reached a settlement with the direct purchaser class. The pharmaceutical company then asked the Massachusetts court for approval.
Late last week, Judge Allison Burroughs of the US District Court for the District of Massachusetts gave her initial approval of the settlement, which includes a $19.9 million payment by Actavis in exchange for the dismissal of litigation between the company and the direct purchaser class.
Burroughs added that the settlement was “arrived at by arm’s-length negotiations by highly experienced counsel, after almost four years of litigation, full fact and expert discovery, and with substantial summary judgment motions pending, falls within the range of possibly approvable settlements”.
A hearing on final approval of the settlement—known as a fairness hearing—will take place on December 9.
This hearing will consider, among other issues, the fairness, reasonableness and adequacy of the settlement, and whether the court should approve the proposed plan of allocation of the settlement fund among direct purchaser class members.
The settlement only involves Actavis, and the litigation will proceed against Shire.
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