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Roxane Laboratories, Inc. v. Smithkline Beecham Corp.

January 26, 2010

ROXANE LABORATORIES, INC., PLAINTIFF
v.
SMITHKLINE BEECHAM CORPORATION D/B/A GLAXOSMITHKLINE, DEFENDANT



The opinion of the court was delivered by: Anita B. Brody, J.

MEMORANDUM

I. INTRODUCTION

On July 9, 2009, Plaintiff Roxane Laboratories, Inc. ("Roxane") filed an Amended Complaint alleging antitrust violations against Defendant SmithKline Beecham Corporation, doing business as GlaxoSmithKline, Inc. ("GSK").

GSK manufactures and sells Flonase Nasal Spray ("Flonase"), a brand name version of fluticasone propionate, used to treat asthma and allergies. Roxane markets a variety of generic drugs, including fluticasone propionate nasal spray ("generic Flonase"). Roxane alleges that GSK filed a series of sham citizen petitions with the Food and Drug Administration ("FDA") to delay the entry of their generic Flonase into the market. Plaintiff brings this action under Section 4 of the Clayton Act, 15 U.S.C. § 15, to recover damages for alleged violations of Section 2 of the Sherman Act, 15 U.S.C. § 2. On July 23, 2009, GSK filed a Motion to Dismiss the Amended Complaint.

II. BACKGROUND*fn1

Under the Federal Food, Drug and Cosmetic Act ("FDCA"), drug manufacturers must receive FDA approval before selling a new drug. When the manufacturer of a new drug obtains FDA approval, it enjoys a period of market exclusivity during which its patent is protected. Once this period expires, other ("generic") manufacturers may market and sell the drug. Before the generic version is approved for sale, a prospective manufacturer of a generic drug must file an Abbreviated New Drug Application ("ANDA") with the FDA. The manufacturer must demonstrate to the FDA that the generic version is the "bioequivalent" of the brand name drug; in other words, the generic version must contain the same active ingredient(s), dosage form, route of administration, and strength. Once a generic drug enters the market, the price and sales volume of the name-brand drug typically drop. The existing ANDA framework, commonly known as the Hatch-Waxman Act, facilitates market entry for generic medications and is intended in part to increase the availability of low-cost generic drugs.

While the approval of a generic drug is pending, "citizen petitions" may be filed with the FDA to express legitimate concerns regarding a product and to request that the FDA take, or refrain from taking, administrative action. Because citizen petitions can delay a generic drug's approval, they are open to abuse by pharmaceutical companies attempting to prolong their monopoly in the market.*fn2

Plaintiff contends that in 2004, as the end of GSK's exclusivity period for Flonase approached, GSK filed a series of sham citizen petitions and related documents solely to delay the FDA's approval of Roxane's generic version of the drug, and with no reasonable basis for objecting to the approval. Plaintiff alleges that because of this unlawful behavior, approval of its generic Flonase was delayed for close to two years. Roxane asserts that it believed the FDA was likely to approve its ANDA in or near May 2004, but that in fact the FDA failed to approve the ANDA until February 22, 2006.

III. JURISDICTION

Jurisdiction over this action is proper under 28 U.S.C. §§ 1331 and 1337(a), and Section 4 of the Clayton Act, 15 U.S.C. § 15.

IV. LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a court must grant a motion to dismiss if the plaintiff fails "to state a claim upon which relief can be granted." In deciding a motion to dismiss pursuant to Rule 12(b)(6), the court must accept as true the well-pleaded allegations of the complaint and draw all reasonable inferences in the plaintiff's favor. Brown v. Card Serv. Ctr., 464 F.3d 450, 452 (3d Cir. 2006). While a complaint "does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks omitted). To survive a motion to dismiss, a complaint must contain "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (internal quotation marks omitted).

V. DISCUSSION

Defendant argues that Plaintiff lacks antitrust standing under applicable antitrust law. A private antitrust plaintiff must demonstrate antitrust standing by establishing a right to a remedy under the Clayton Act. See Out Front Prods., Inc. v. Magid, 748 F.2d 166, 168-69 (3d Cir. 1984);Associated Gen. Contractors ...


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