The opinion of the court was delivered by: Anita B. Brody, J.
Flonase is the brand-name version of fluticasone propionate ("FP")-a nasal corticosteroid produced by Defendant SmithKline Beecham Corporation d/b/a GlaxoSmithKline PLC ("GSK"). The Food and Drug Administration ("FDA") approved Flonase to treat nasal inflammation caused by seasonal and non-seasonal allergies. Until recently, Flonase was one of the nation's top-selling drugs, generating sales well over $1 billion in its peak years. This case concerns allegations that GSK restrained competition in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2, by delaying the entry of generic FP into the market. Plaintiffs, American Sales Company, Inc., Meijer, Inc., and Meijer Distribution, Inc. (collectively, the "Direct Purchasers"), bring suit as direct purchasers of Flonase who were allegedly overcharged for Flonase as a result of GSK's actions.*fn1 Direct Purchasers now move for class certification under Fed. R. Civ. P. 23(b)(3), proposing a class of: "all persons or entities in the United States and its territories who purchased and/or paid for Flonase nasal spray directly from Defendant (or any of its predecessors or affiliates) at any time from May 19, 2004 until the anticompetitive effects of Defendant's conduct ceased" (the "Proposed Class").
Although Defendant does not contest the Direct Purchasers' Motion for Class Certification, recent Third Circuit precedent makes clear that I must "consider carefully all relevant evidence and make a definitive determination that the requirements of Rule 23 have been met before certifying a class." In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 320 (3d Cir. 2008). After considering all of the relevant evidence, I conclude that Direct Purchasers have met their burden under Rule 23. I will therefore grant Direct Purchasers' Motion for Class Certification.*fn2
A. The Hatch-Waxman Act and the Generic Drug Approval Process
In order to market a drug in the United States, a company must file a "New Drug Application" ("NDA") with the FDA. Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq. (1994). In 1984, Congress enacted the Hatch-Waxman Act ("Hatch-Waxman"), which amended the Federal Food, Drug, and Cosmetics Act, and created an expedited approval process for generic drugs. Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (1984) (codified in various sections of titles 15, 21, 35, and 42 of the U.S. Code), as amended by Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, tit. XI, subtits. A-B, 117 Stat. 2066, 2448-64 (codified at 21 U.S.C. § 355 (Supp. III 2003)). Under Hatch-Waxman, a company applying to make a generic version of a compound listed in the Orange Book need only file an Abbreviated New Drug Application ("ANDA"), requiring a demonstration of a certain level of bioequivalence to a listed drug instead of clinical trials. 21 U.S.C. § 355(j). The FDA issues public bioequivalence guidance for various categories of generic drugs. This guidance informs the public of the bioequivalence standards that ANDAs must meet in order to be approved. The FDA regularly modifies their bioequivalence guidance for specific categories of drugs.
While an ANDA is pending before the FDA, any interested party can file a citizen petition (a "Petition") with the FDA to register a complaint about the pending application. 21 C.F.R. §§ 10.25(a), 10.30. Until 2007, the FDA was required to consider and respond to every Petition.*fn4 For this reason, filing a Petition necessarily delayed the approval of any pending ANDA-only after the FDA responded to all pending Petitions could an ANDA be approved.
GSK developed Flonase in the early 1980s, filing a patent in the United Kingdom in 1980, and in the United States in 1981. See U.S. Patent No. 4,335,121 (filed Feb. 13, 1981). Flonase was first released in Europe in 1991 under the trade name Flixonase. GSK subsequently filed NDA #20-121, requesting approval to release the drug in the United States. In October 1994, the FDA approved GSK's NDA to treat nasal inflammation caused by seasonal and non-seasonal allergies. GSK released Flonase in the United States in 1995, and it quickly became the most prescribed nasal steroid inhalant in the United States. By 2000, Flonase commanded 38% of brand-name inhaled nasal steroid sales in the United States, resulting in over $600 million in sales. By 2005, the peak year for Flonase sales and the last year of GSK's market exclusivity, Flonase sales exceeded $1.3 billion.
By the time Flonase's market exclusivity was set to expire, GSK had identified a number of generic pharmaceutical manufacturers intent on filing ANDAs and bringing competitive generic FP nasal sprays to the market. This case concerns GSK's alleged "brand maturation strategy," crafted to maintain Flonase's market dominance in the face of inevitable generic competition.
C. GSK's Allegedly Anti-Competitive Conduct*fn5
Direct Purchasers offer evidence that GSK's alleged "brand maturation strategy" included four tactics to delay the entry of generic FP nasal sprays into the market. First, Direct Purchasers allege that GSK improperly influenced the FDA's bioequivalence guidance process. GSK allegedly encouraged the FDA to refrain from approving any FP ANDAs before it issued final bioequivalence guidance governing FP ANDAs. GSK then sought to slow the issuance of final bioequivalence guidance. GSK also petitioned the FDA to set extremely rigorous bioequivalence requirements using strict new tests that generic manufacturers would struggle to satisfy.
Second, Direct Purchasers provide evidence that GSK filed several Petitions with the FDA regarding pending FP ANDAs in order to force the FDA to respond and delay approval. Direct Purchasers allege that these Petitions were frivolous and only served to delay ANDA approval, rather than to raise genuine concerns with the applications.
Third, Direct Purchasers allege that GSK drafted an FP monograph for submission to the United States Pharmacopeia ("USP"), an "independent compendium of drug standards whose authority is recognized by reference in federal law." Med. Ctr. Pharmacy v. Mukasey, 536 F.3d 383, 388 (5th Cir. 2008). USP monographs list tests, procedures, and acceptance criteria in order to set standards for the quality, purity, strength, and consistency of the pharmaceutical ingredients in an approved drug. USP monographs also set standards that imported drugs must meet, and generally inform the pharmaceutical community about the acceptable standards for any pharmaceutical product. By drafting a USP monograph with rigorous standards, Direct Purchasers claim that GSK attempted to raise the bar for generic competitors and make it more difficult and thereby more costly to enter the market.
Finally, Direct Purchasers provide evidence that GSK supplemented its original NDA in an attempt to delay the FDA from approving any ANDAs before approving GSK's supplements. This action would necessarily delay ANDA approval, because the ANDAs could not be approved while the FDA was considering modifying the underlying NDA. Additionally, GSK hoped that the supplements would make generic entry into the market even more difficult because GSK's NDA supplements contained additional requirements for FP nasal sprays. Direct Purchasers argue that GSK used each of these four tactics to illegally maintain monopoly power in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2.
Subsection (a) of Fed. R. Civ. P. 23 lists four prerequisites for any class action: numerosity, commonality, typicality, and adequacy. Fed. R. Civ. P. 23(a). Subsection (b) specifies additional requirements for each type of class action. For certification under subsection (b)(3), the movant must also show "that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. P. 23(b)(3). These requirements are called predominance and superiority.
In In re Hydrogen Peroxide, the Third Circuit clarified the standard of review for Motions for Class Certification. The court held that "proper analysis under Rule 23 requires rigorous consideration of all the evidence and arguments offered by the parties." In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 321 (3d Cir. 2008). A district court must "consider carefully all relevant evidence and make a definitive determination that the requirements of Rule 23 have been met before certifying a class." Id. at 320. Further, "the court must resolve all factual or legal disputes relevant to class certification, even if they overlap with the merits... [and] [f]actual determinations necessary to make Rule 23 findings must be made by a preponderance of the evidence." Id. at 307, 320. Finally, "[w]eighing conflicting expert testimony at the certification stage is not only permissible; it may be integral to the rigorous analysis Rule 23 demands." Id. at 323. "[A] district court may find it unnecessary to consider certain expert opinion with respect to a certification requirement, but it may not decline to resolve a genuine legal or factual dispute" relevant to class certification. Id. at 324.
Here, GSK does not dispute assertions made by Direct Purchasers, or Direct Purchasers' class certification experts. Nonetheless, "[a] party's assurance to the court that it intends or plans to meet the requirements [of Rule 23] is insufficient." Id. at 318. As such, I must still carefully consider Direct ...