In re Lipitor Antitrust Litigation
2014 U.S. Dist. LEXIS 127877
D.N.J.2014Background
- MDL Lipitor antitrust matter; direct purchasers allege Pfizer–Ranbaxy reverse payment settlement delaying generic Lipitor entry.
- Settlement Agreement dated June 17, 2008 resolved Lipitor, Accupril, and Caduet litigations and numerous foreign proceedings.
- Ranbaxy agreed not to enter the US atorvastatin market until November 30, 2011; Pfizer purportedly forgave damages in Accupril II and granted foreign licensing rights.
- Lipitor protected by seven patents; active‑ingredient patents ('893, '995) and multiple back‑up patents; Process Patents not listed in the Orange Book.
- Ranbaxy filed ANDA for Lipitor in 2002 with Paragraph IV certifications; related patent litigation and judgments culminated in settlements within the Settlement Agreement.
- Court applies Actavis rule‑of‑reason framework, incorporating Twombly/Iqbal plausibility standards; dismisses Direct Purchaser Complaint for failure to plead a plausible, value‑estimated non‑monetary payment and whole‑agreement effects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Settlement Agreement contains a reverse payment | Plaintiffs contend Pfizer paid Ranbaxy to delay Lipitor entry. | Pfizer/Ranbaxy argue terms fall outside Actavis scrutiny or combine with other factors; alleged payments may be justified as settlements. | No plausible reverse payment shown; not adequately valued or explained. |
| Whether non‑monetary payments can satisfy Actavis | Plaintiffs allege non‑monetary concessions (foreign licenses, forbearance) constitute value. | Settlement could involve non‑monetary items; must be valued to apply Actavis factors. | Non‑monetary payment must be valued with reliable foundation; pleading lacks reliable monetary valuation. |
| Whether the complaint pleads a plausible value of the payment considering all terms | Plaintiffs rely on bond amounts or implied profits to value the payment. | Payments must be valued using industry methods; isolated terms mislead analysis. | Plaintiffs failed to provide a reliable valuation; plausible measure of damages not pled. |
| Whether the Settlement Agreement must be considered as a whole | Focusing on Lipitor processes alone is inappropriate; entire agreement should be assessed. | Parts related to Accupril/Caduet may be severed as separate matters. | The entire Settlement Agreement must be analyzed; selective treatment renders pleading implausible. |
| Whether to replead or dismiss with prejudice | Plaintiffs may be entitled to amend to plead plausibly. | Twombly/Iqbal require a plausible claim; repeated failure to plead warrants dismissal. | Amended complaint dismissed with prejudice. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (tangible pleading standard: more than labels, must raise plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard; reject bare conclusions)
- FTC v. Actavis, Inc., 570 U.S. 122 (U.S. 2013) (rule‑of‑reason framework for reverse settlements; large unexplained payments scrutinized)
- California Dental Assn. v. FTC, 526 U.S. 756 (U.S. 1999) (guidance on rule of reason and settlements)
- Tamoxifen Citrate Antitrust Litig., 466 F.3d 187 (2d Cir. 2006) (context of complex pharmaceutical settlements; pleading considerations)
- LePage's, Inc. v. SM, 324 F.3d 141 (3d Cir. 2003) (monopoly power and restraint context in antitrust)
- Panduit Corp. v. Stahlin Bros. Fibre Works, 575 F.2d 1152 (6th Cir. 1978) (damages estimation elements for profits/lost sales)
- Girsh v. Jepson, 521 F.2d 153 (3d Cir. 1975) (class action settlement considerations; settlement factors)