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In Re Flonase Antitrust Litigation v. Smithkline Beecham Corporation D/B/A Glaxosmithkline

July 14, 2011


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



Flonase is a steroid nasal spray containing the active pharmaceutical ingredient fluticasone propionate ("FP") produced by Defendant SmithKline Beecham Corporation, doing business as GlaxoSmithKline PLC ("GSK").*fn1 Until recently, Flonase was one of the nation's top-selling drugs. Three different suits have been filed against GSK, alleging various antitrust violations stemming from GSK's conduct that supposedly delayed the entry of generic FP nasal sprays into the market. The three suits are brought by: (1) direct purchasers of Flonase in American Sales Co., Inc. v. SmithKline Beecham Corp., No. 08-cv-3149 (E.D. Pa. filed July 3, 2008); (2) indirect purchasers of Flonase in IBEW-NECA Local 505 Health & Welfare Plan v. SmithKline Beecham Corp., No. 08-cv-3301 (E.D. Pa. filed July 14, 2008); and (3) Roxane Laboratories, Inc. ("Roxane"), a manufacturer of a generic FP nasal spray and competitor of GSK in Roxane Laboratories, Inc. v. SmithKline Beecham Corp., No. 09-cv-1638 (E.D. Pa. filed April 17, 2009). GSK has now moved for summary judgment under Fed. R. Civ. P. 56 in all three suits, arguing that Plaintiffs have not proven that GSK's conduct caused the delayed entry of generic FP nasal spray into the market. (No. 08-3149 (Direct) ECF No. 150; No. 08-3301 (Indirect) ECF No. 272; No. 09-1638 (Roxane) ECF No. 97).*fn2 For the following reasons I will DENY this Motion.*fn3


In my June 2, 2011 Opinion denying GSK's Motion for Summary Judgment on NoerrPennington grounds (No. 08-3149 (Direct) ECF No. 151; No. 08-3301 (Indirect) ECF No. 190; No. 09-1638 (Roxane) ECF No. 98), I provided a detailed discussion of the generic drug approval process under the Hatch-Waxman Act ("Hatch-Waxman"). Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (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). Specifically, I detailed the process for filing an Abbreviated New Drug Application ("ANDA")-an application to the United States Food and Drug Administration ("FDA") for permission to market generic drugs that demonstrate a certain level of bioequivalence ("BE") to an FDA-approved brand-name drug. I also set out the history behind the FDA's approval of Flonase, as well as behind GSK's alleged attempts to influence the approval of ANDAs for generic FP nasal sprays by filing citizen petitions with the FDA in May and November of 2004. In this Opinion I set out additional facts that are relevant to this Motion, which concerns Plaintiffs' allegations that GSK's conduct caused the delayed entry of Roxane's generic nasal spray into the market.

A. ANDA Approval Process

There are two sections in every ANDA: (1) a BE section that contains data meant to show that the generic drug is bioequivalent to an approved brand-name drug; and (2) a Chemistry and Manufacturing Controls ("CMC") section that describes the active and inactive pharmaceutical ingredients used in the drug, as well as the controls in place to ensure that the ingredients meet certain quality and consistency standards. When the FDA receives an ANDA, it reviews the BE section of the ANDA in a process known as "BE review" to determine whether the ANDA demonstrates BE compliance. The FDA separately reviews the CMC section of the ANDA in a process known as "chemistry review." The chemistry review assesses whether the quality controls in the CMC section are sufficient to ensure product quality and manufacturing consistency. The chemistry review also determines whether the proposed source of the active pharmaceutical ingredient ("API") complies with FDA requirements.

If the FDA identifies a problem with an ANDA, it contacts the applicant through a "deficiency notice." If the problem is minor, the FDA may simply contact the applicant's regulatory liaison to resolve the issue via telephone. Such problems are expected to be resolved within sixty days after they are identified. If the problem is more substantial, however, it is classified as a "major amendment." For such problems, the FDA issues a deficiency notice identifying the issue that requires an amendment. The FDA expects to resolve these deficiencies within six months after they are identified.

B. United States Pharmacopeia and the Monograph for FP

United States Pharmacopeia ("USP") is a non-governmental organization that issues a compendium of drug standards for use in the pharmaceutical industry. Although USP is not a governmental body, federal law specifically incorporates its standards. See 21 U.S.C. §§ 351(a)-(b), 352(e)-(g), 355(u)(3)(A). The FDA regularly consults USP standards as a reference point when issuing its own pharmaceutical standards.

USP issues "monographs" for specific drug compounds; these monographs list tests, procedures, and acceptance criteria related to the quality, purity, strength, and consistency standards for the pharmaceutical ingredients in an approved drug. When a USP monograph is modified or published, the FDA generally permits any drug manufacturers affected by the new monograph to exhaust existing supplies of their non-compliant drugs, but requires future batches to comply with the USP monograph.

As early as 2001, GSK began to consider working with USP to publish a monograph for FP. Although it is unclear exactly when it began to actually work towards a monograph, GSK eventually submitted a proposed monograph to USP. GSK's proposed monograph imposed higher standards than those outlined in the FDA's Draft Guidances. In March 2005, after GSK filed its two citizen petitions, USP published its monograph for FP, which incorporated GSK's higher standards. On April 1, 2005, USP finalized the monograph.

C. Roxane Works With the FDA to Remedy Deficiencies in its ANDA

In 2003, the FDA began its BE and chemistry reviews of Roxane's ANDA. Between 2003 and 2006, the FDA identified a number of deficiencies in Roxane's ANDA that Roxane was required to address before the FDA would approve Roxane's ANDA.During this period, in May and November of 2004, GSK filed citizen petitions with the FDA requesting that the FDA change its positions on various standards and specifications governing ANDAs for a suspension-based FP nasal spray like Roxane's. The arguments raised in these petitions are discussed in greater detail in my Noerr-Pennington Opinion. For purposes of this Motion, what is important is simply that: (1) GSK filed citizen petitions in May and November of 2004; (2) the May and November petitions requested that the FDA refrain from approving any ANDA before resolving the petitions; and (3) on February 22, 2006, the FDA denied GSK's requests in full.

1. Early Deficiencies and the FDA's June 2004 Suggestion that Approval Was Imminent The FDA began its chemistry review in March 2003, and began its BE review in November 2003.

(a) Early BE Review

In December 2003, soon after the FDA began its BE review, the FDA concluded that Roxane demonstrated BE compliance using the population bioequivalence method.*fn5 In addition, the FDA recognized that Roxane's data did not show BE compliance using the geometric mean ratio method, but nevertheless concluded that the population bioequivalence method was sufficient to show BE compliance.

In its December 2, 2003 report, the FDA found no deficiencies in Roxane's in vitro BE data, and merely requested additional information on Roxane's in vivo clinical testing procedures. On December 19, 2003, Roxane provided the requested information. Finally, in February 2004 an internal FDA review of Roxane's bioequivalence data found that "[f]rom the bioequivalence viewpoint, [Roxane] has met the requirements of formulation sameness, device comparability, in vitro and in vivo performance testing." Def. Ex. 46 at 8 (Report, FDA Division of Bioequivalence, Feb. 11, 2004).

(b) Early Chemistry Review

Between March 2003 and May 2004, Roxane worked with the FDA to remedy a number of deficiencies relating to Roxane's API. On May 19, 2004, Roxane held a teleconference with the FDA to discuss what Roxane believed would be the final deficiency in its CMC section. The FDA agreed that the remaining deficiency was minor and indicated that its chemistry review was nearing completion.

(c) Preparations to Enter Market After FDA Suggests that ANDA Approval Is Imminent In May 2004, after the FDA indicated that its chemistry review was almost complete, Roxane anticipated an imminent product launch. Roxane began to manufacture units for sale, ...

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