The opinion of the court was delivered by: McLaughlin, J.
American Sales Company, Inc., Meijer, Inc., Meijer Distribution, Inc., and Rochester Drug Co-Operatrive comprise a group of direct purchasers of Wellbutrin XL, a once-a-day antidepressant. These companies are suing the producers of Wellbutrin XL, Biovail Corp., Biovail Laboratories, Biovail Laboratories International (together, "Biovail"), and its distributors SmithKline Beecham Corp. and GlaxoSmithKline PLC (together, "GSK") for illegally conspiring to prevent generic versions of Wellbutrin XL, or buproprion hydrochloride, from entering the American market for that drug.*fn1
The three claims against Biovail and GSK are (1) a violation of section 2 of the Sherman Act, which prohibits monopolization; (2) a separate violation of section 2 of the Sherman Act on the basis of conspiring to monopolize; and (3) a violation of section 1 of the Sherman Act, which prohibits contracts or combinations in restraint of trade.
Biovail and GSK submitted separate motions to dismiss the complaint. Biovail argues that the complaint does not allege that either party formed a monopoly, which is fatal to the first Section 2 claim. Biovail also argues that the complaint does not sufficiently allege concerted action sufficient to state a claim for conspiracy under either section 1 or 2. GSK argues that the complaint alleges no actions on its part that caused any of the alleged harms and also that the complaint insufficiently states a claim for conspiracy or concerted action.
Certain provisions of federal law relating to the procedures for approving new drugs are at the center of the plaintiffs' allegations. The plaintiffs claim that Biovail and GSK abused provisions of the Food, Drug and Cosmetic Act, 21 U.S.C. §§ 301-392 ("FDCA"), for the purpose of delaying the marketing of generic versions of their drug Wellbutrin XL.
The FDCA provides two different sets of procedures for the approval of new drugs. First, the manufacturer of a new drug must obtain approval from the Food and Drug Administration ("FDA") by filing a New Drug Application ("NDA"). This application contains data as to safety and effectiveness. In filing an NDA, manufacturers also list any patents that the manufacturer believes could reasonably be asserted against a generic manufacturer who makes, uses, or sells a generic version of the drug prior to the expiration of the listed patents. These patents are listed in the FDA's book of Approved Drug Products with Therapeutic Equivalence Evaluations (known as the "Orange Book"). The complaint states that the FDA does not exercise tight supervision over the contents of the Orange Book, relying on manufacturers to list patents in good faith. Compl., ¶ 33.
The second approval procedure was established in 1984 by the Hatch-Waxman Amendments. Pub. L. No. 98-417, 98 Stat. 1585 (1984). The purpose of the Amendments was to speed the approval of generic versions of brand-name drugs while respecting brand manufacturers' patent rights. Generic manufacturers need not file NDAs. Instead, they may file Amended New Drug Applications ("ANDA"). ANDAs require a showing of safety and effectiveness and a showing of bioequivalency to an approved brand-name drug. Bioequivalency refers to equivalency of the active ingredient, dosage, route of administration and strength between a brand-name and generic drug. Compl., ¶ 10.
As part of an ANDA, generic manufacturers must certify that they will not infringe any brand manufacturers' patents. One method of certification is referred to as a "Paragraph 4" certification, which requires the generic manufacturer to state that a potentially conflicting Orange Book patent is either invalid or will not be infringed by the proposed generic.
The Hatch-Waxman Amendments seek to protect brand manufacturers' patents. In the case of an ANDA including a Paragraph 4 certification, brand manufacturers have 45 days from the date of notice of the ANDA's filing to initiate litigation on any potentially infringed patents. If the brand manufacturer brings suit within that 45 day window, then the FDA may not give final approval to the generic drug for the shorter of 30 months or a finding by the court that the patent is invalid or not infringed.
The plaintiffs also base their complaint on a separate provision of the FDCA. Section 505(j) of the FDCA allows for a person (including a corporation) to file a "Citizen Petition" requesting that the agency take or refrain from taking any administrative action, which may include the approval of a generic drug. The FDA must respond to these petitions within 180 days of their filing. The plaintiffs allege that, until a 2007 amendment to the FDCA, it was common practice for the FDA to withhold ANDA approval until after consideration of a Citizen Petition. Compl., ¶ 43.
II. Allegations of the Plaintiffs' Complaint
The plaintiffs allege that GSK and Biovail have acted in concert to abuse the provisions of the Hatch-Waxman Amendments by filing meritless litigation in an effort to delay the entry of generic competitors into the American market for Wellbutrin XL. They also allege that Biovail filed a baseless citizen petition with the FDA in a further attempt to delay the generics' market entry.
The complaint makes the following assertions. Biovail and Pharma Pass, LLC, collaborated to create an extended release formula for buproprion hydrochloride in the 1990s. Compl., ¶ 66. Pharma Pass's chemists created an extended release version of the drug using off-the-shelf chemical compounds unworthy of patent protection in themselves. However, they were able to acquire a patent on their formula by claiming that it was "free of stabilizer of any kind." "Stabilizer" is the term used for a chemical or compound that prolongs the release of a drug after initial administration. This formula received patent No. 6,096,341 (the "341 patent"). Id., ¶¶ 70-71. A continuation of the 341 patent was issued on November 7, 2000. This patent number was 6,143,327 (the "327 patent"). Id., ¶ 86. Biovail acquired Pharma Pass in December of 2002 and later obtained the rights conferred by the 341 and 327 patents. Id., ¶ 87.
On October 26, 2001, Biovail and GSK entered into a contract to promote and distribute Wellbutrin XL in the United States and Canada. Id., ¶ 89. In August of 2002, GSK filed a New Drug Application ("NDA") with the FDA. GSK listed the 341 and 327 patents in the FDA's Orange Book as patents that could reasonably be asserted to cover Wellbutrin XL. Id., ¶ 91. The plaintiffs assert that the 327 patent was improperly listed in the Orange Book because it did not conform to the description of the underlying 341 patent. Id., ¶¶ 137-38. The FDA issued approval of Wellbutrin XL to GSK on August 8, 2003. Id., ¶ 92 On December 31, 2004, the 341 and 327 patents were formally assigned to Biovail. Id., ¶ 95.
On September 21, 2004, Anchen (a generic manufacturer of bupropion hydrochloride) filed an ANDA seeking FDA approval to market Wellbutrin XL's generic alternative in a 150mg and 300mg formulation. Anchen's ANDA included a Paragraph 4 certification that stated that it would not infringe the 341 or 327 patents. The basis for this assertion was the presence of "stabilizer" compounds in the Anchen generic version. Id., ¶ 101. On September 23, 2004, Abrika, another generic manufacturer, filed a similar ANDA, as did the manufacturer Impax on November 30, 2004.
Id., ¶¶ 105, 108. On July 21, 2005, the manufacturer Watson filed a similar ANDA for the 300mg formulation of bupropion hydrochloride. Id., ¶ 111.
The complaint alleges that on December 21, 2004, GSK and Biovail filed an action against Anchen alleging infringement of the 341 and 327 patents in the Central District of California. The same claims were made by GSK and Biovail against Abrika in the Southern District of Florida. Id., ¶ 114-15. In both cases, the claims based on the 327 patent were eventually withdrawn.
Id., ¶ 142. On March 7, 2005, Biovail filed an action against Impax alleging a violation of the 341 patent. Id., ¶ 116. Biovail later filed ...