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In Re: Flonase Antitrust Civil Action Litigation

July 23, 2012


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



I. Background

Direct and Indirect Purchasers of a steroid nasal spray containing the active ingredient fluticasone propionate ("FP"), along with Roxane Laboratories, Inc. ("Roxane"), a generic FP manufacturer, have brought actions against Defendant SmithKline Beecham Corporation, doing business as GlaxoSmithKline PLC ("GSK"), the manufacturer of the branded version of FP ("Flonase"), alleging various violations arising from GSK's conduct delaying market entry of generic FP. In its defense, GSK asserts, inter alia, that its conduct-particularly the filing of citizen petitions with the Federal Drug Administration ("FDA") regarding issues related to Roxane's Abbreviated New Drug Application ("ANDA")-is protected from antitrust liability under the First Amendment and the Noerr-Pennington doctrine, and, additionally, is not the actual cause of generic delay into the market.*fn1

Under the Noerr-Pennington doctrine, a party that exercises its First Amendment right to "petition[] the government for redress generally is immune from antitrust liability." Cheminor Drugs, Ltd v. Ethyl Corp., 168 F.3d 119, 122 (3d Cir. 1999) (citing E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); United Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965)). However, one exception to the Noerr-Pennington doctrine is when the conduct "is a mere sham to cover . . . an attempt to interfere directly with the business relationships of a competitor . . . ." Noerr, 365 U.S. at 144. The Supreme Court has established a two-pronged test to determine whether a party's conduct is a sham and therefore not entitled to Noerr-Pennington immunity. See Prof'l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc. [hereinafter "PRE"], 508 U.S. 49 (1993). Under the first prong, known as the objective prong, plaintiffs must show that "a reasonable petitioner could not realistically expect that the petition will succeed on its merits." In re Flonase Antitrust Litig., 795 F. Supp. 2d 300, 311 (E.D. Pa. 2011) (citing Cheminor, 168 F.3d at 122--23; Bryant v. Military Dep't of Miss., 597 F.3d 678, 693 (5th Cir. 2010)). The second prong, labeled the subjective prong, is only reached if the challenged conduct is deemed objectively meritless. It requires the court to examine the defendant's "subjective motivation" to determine if the conduct "conceals 'an attempt to interfere directly with the business . . . of a competitor.'" PRE, 508 U.S. at 60--61 (quoting Noerr, 365 U.S. at 144).

The parties in these three related actions have retained numerous experts to opine on issues relating to liability, including the Noerr-Pennington doctrine and causation, as well as damages. In 2010, the parties filed several motions to exclude the reports and testimony of certain expert witnesses. In June 2011, I denied without prejudice all those motions that did not relate to Indirect Purchaser Plaintiffs' ("Indirect Purchasers") then-pending motion for class certification. In early 2012, the parties re-filed their respective motions to exclude, but then subsequently withdrew the majority of the motions by stipulation.

Before me now are two motions to exclude the reports and testimony of expert witnesses:

(1) GSK's Motion to Exclude in Part the Expert Report and Testimony of Leslie Benet and (2) Plaintiffs' Motion to Exclude the Proposed Expert Testimony of Mary Pendergast. These experts are proffered to opine on, inter alia, issues related to the objective prong of PRE test (i.e., whether a reasonable petitioner could realistically expect that GSK's citizen petitions will succeed on its merits) and causation. Pursuant to the Supreme Court's decisions in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1997), a hearing was held on April 18 and 19, 2012 to determine whether the testimony of Benet and Pendergast is admissible under Federal Rules of Evidence 702 and 703.*fn2

For the reasons set forth below, I will deny both of these motions.

II. Legal Standard for Expert Testimony

The party offering an expert must demonstrate, by a preponderance of the evidence, that the expert's qualifications and opinions comply with Federal Rule of Evidence 702. See Daubert, 509 U.S. at 592-93 (citation omitted). Rule 702 provides:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.

Fed. R. Evid. 702. Rule 702 has "a liberal policy of admissibility." Pineda v. Ford Motor Co., 520 F.3d 237, 243 (3d Cir. 2008) (citation omitted).

The Third Circuit has explained that to survive a Daubert challenge, an expert must satisfy three "restrictions on expert testimony: qualification, reliability, and fit." Schneider ex rel. Estate of Schneider v. Fried, 320 F.3d 396, 404 (3d Cir. 2003) (citations omitted). The qualification inquiry examines whether a witness possesses specialized expertise. The Third Circuit "has interpreted this requirement liberally, holding that a broad range of knowledge, skills, and training qualify an expert." Id. (citing In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 742 (3d Cir. 1994)).

For an expert's testimony to be reliable, it "must be based on [] methods and procedures . . . rather than subjective belief or speculation." In re TMI Litig., 193 F.3d 613, 670 (3d Cir. 1999). "[T]he admissibility inquiry thus focuses on principles and methodology, not on the conclusions generated by principles and methodology." Id. at 665. Furthermore, an "expert's testimony must be accompanied by a sufficient factual foundation before it can be submitted to the jury." Elcock v. Kmart Corp., 233 F.3d 734, 754 (3d Cir. 2000) (citation omitted).

Finally, Rule 702 requires that the expert testimony fit the issues in the case. Testimony "fits" a case when it is "relevant for the purposes of the case and . . . assist[s] the trier of fact." Schneider, 320 F.3d at 404.

III. Discussion

A. Plaintiffs' Expert Leslie Benet

At trial, Plaintiffs intend to introduce the expert testimony of Dr. Leslie Benet, a professor of bioengineering and therapeutic sciences at the University of California at San Francisco in the Schools of Pharmacy and Medicine for the last forty-three years. Benet has also worked as a consultant to numerous generic and brand drug manufacturers and been a member of several FDA advisory committees. See Expert Report of Leslie Benet, May 11, 2010 ("Benet Report")

¶¶ 1-7; Daubert Hr'g Tr. 16, April 19, 2012 ("Benet H'rg Tr."). Benet is proffered to opine generally on bioequivalence issues and specifically as to the merits of GSK's citizens petitions. Benet Report ¶ 10.

At the hearing on April 19, 2012, Roxane*fn3 withdrew those portions of Benet's report and testimony that related to causation and GSK's intent in filing the citizen petitions. See Benet Hr'g Tr. 9. As a result, the parties acknowledged, at the hearing and in subsequent supplemental briefing, that they had reached an agreement on the admissibility or lack of admissibility of nearly all of Benet's report and testimony. The lone outstanding dispute concerns Benet's opinion, found in paragraphs 42 to 48 of his expert report, on GSK's knowledge, awareness, or understanding regarding whether a final guidance from the FDA needed to be issued prior to approval of an Abbreviated New Drug Application ("ANDA") for generic FP.

Benet opines, inter alia, on the merits of GSK's request to the FDA, in its May 2004 citizen petition, that a final guidance document be issued before any approval of an ANDA for generic FP. Specifically, he states in his expert report: "It is well understood by participants in the pharmaceutical industry that the FDA may approve an ANDA prior to the issuance of a final guidance, and that the FDA is not precluded from approving ANDAs merely because it has issued a draft guidance that relates to a proposed drug product." Benet Report ¶ 41. Benet further opined that "there was no reasonable basis to believe that the FDA would grant GSK's request that it refrain from approving ANDAs for fluticasone propionate pending issuance of a final guidance document relating to nasal suspension products." Id. ¶ 51.

Benet explained that the information forming the basis of this opinion is his "significant experience with both brand name companies and generic companies," his academic knowledge, and his understanding of applying and utilizing FDA guidance documents. Benet Hr'g Tr. 25. As an additional basis for his opinion, and the subject of the instant dispute, Benet performed a review of certain GSK internal documents produced in this litigation to demonstrate that GSK's knowledge, awareness, and understanding regarding FDA practice in approving ANDAs with or without final guidance was consistent with his opinion. See Benet Report ¶¶ 42-48. For example, Benet cites to a report by a consulting firm retained by GSK that noted that the FDA "routinely approves ANDAs before final Guidances are published . . . ." Id. ¶ 45. As another example, Benet opines that "GSK further understood that because it used the draft guidances to develop its own products that FDA would expect an ANDA sponsor to use the same draft guidance in developing its products," and cites to GSK internal documents as support. Id. ¶ 46.

Benet, however, has offered differing explanations for how his review of GSK internal documents, in paragraphs 42-48 of his report, fits with his opinion about the reasonableness of GSK's FDA final guidance request. When asked about this fit at his deposition, Benet stated:

[I]t's just to support my contention that GSK was well aware that this argument that they're making would not be approved and was not what FDA would -- the procedures that FDA would follow, both from their own ...

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