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In re Suboxone (Buprenorphine Hydrochloride and Naloxone) Antitrust Litigation

United States District Court, E.D. Pennsylvania

January 4, 2017

IN RE SUBOXONE (BUPRENORPHINE HYDROCHLORIDE AND NALOXONE) ANTITRUST LITIGATION
v.
Indivior Inc. et al., 16-cv-563 THIS DOCUMENT APPLIES TO Amneal Pharmaceuticals LLC No. 13-MD-2445

          MEMORANDUM OPINION

          GOLDBERG, J.

         This antitrust litigation involves allegations regarding the sale of Suboxone, a drug used to treat opioid dependence. During the infancy of this case, Direct Purchaser Plaintiffs and End-Payor Plaintiffs (“Class Plaintiffs”) filed consolidated class action complaints alleging that Indivior Inc., [1] the manufacturer of brand name Suboxone, unlawfully delayed and impeded competition from generic versions of Suboxone tablets. Class Plaintiffs claimed that Indivior's conduct negatively affected competition and resulted in ongoing overpayments by consumers.

         On December 3, 2014, I issued an opinion dismissing one of Direct Purchaser Plaintiffs' stand-alone claims, a variety of state law claims brought by End-Payor Plaintiffs as well as the claims against several of the Defendant entities. Thereafter, Class Plaintiffs filed amended complaints, answers were filed, and a discovery scheduling order was entered.

         On December 23, 2015, Amneal Pharmaceuticals LLC, a generic manufacturer and competitor of Indivior, [2] filed a Complaint in the District of New Jersey regarding Indivior's alleged anticompetitive conduct surrounding Suboxone. That action was transferred to the Eastern District of Pennsylvania in February of this year and consolidated with the MDL currently before me.

         The allegations contained in Amneal's Complaint are similar to those contained in the Direct Purchaser Plaintiffs' Complaint. Amneal's Complaint consists of the following claims: (1) monopolization in violation of 15 U.S.C. § 2; (2) attempted monopolization in violation of 15 U.S.C. § 2; and (3) false advertising in violation of the Lanham Act, 15 U.S.C. § 1152(a). Indivior has filed a partial motion to dismiss Amneal's Complaint.[3] For the reasons that follow, Indivior's motion will be granted in part and denied in part.

         I.LEGISLATIVE FRAMEWORK

         As it is necessary to understand Amneal's claims, the relevant statutory and regulatory frameworks are set forth below.

         A. NDA, ANDA and A/B Rating

         Under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301, et seq., a manufacturer who creates a new drug must obtain approval from the Food and Drug Administration (“FDA”) to sell the drug through the filing of a New Drug Application (“NDA”). (Amneal Compl. at ¶ 27.) As part of a NDA filing, applicants are required to submit any patents that claim the drug or a method of using the drug and also to demonstrate the drug's efficacy and safety. (Id. at ¶ 27.)

         The Drug Price Competition and Patent Term Restoration Act, Pub. L. No. 98-417 (1984), commonly referred to as the Hatch-Waxman Act, was designed to lower the costs of prescription drugs and encourage generic drug competition. The Hatch-Waxman Act amended the FDA's approval process to allow generic manufacturers to file Abbreviated New Drug Applications (“ANDA”). (Id. at ¶ 28.)

         In order to gain FDA approval of an ANDA, a generic drug manufacturer must demonstrate that its generic version is “bioequivalent” to the NDA brand name drug. In order for a drug to be found to be bioequivalent, the generic product must deliver the same amount of active ingredient for the same amount of time as the brand name drug. The Hatch-Waxman Act allows generic manufacturers seeking ANDA approval to rely on data and clinical studies supporting a brand manufacturer's NDA. (Id. at ¶¶ 33, 34.)

         Approval of ANDAs are subject to statutory delays based on exclusivities awarded to the corresponding NDA reference drugs. One such exclusivity is a seven year “orphan drug exclusivity, ” 21 U.S.C. 360bb(a)(2)(A-B), which is awarded to drugs intended to “treat a disease or condition for which there is (a) a U.S. prevalence of less than 200, 000 persons; or (b) no reasonable expectation that the costs of developing and making the drug available will be recovered from U.S. Sales.” (Id. at ¶¶ 29, 31.)

         ANDA filers demonstrating bioequivalence also generally seek to have their product deemed “AB-rated” to the brand name drug, meaning that in addition to being bioequivalent, the two drugs are also pharmaceutically equivalent-which includes such considerations as having the same active ingredient, the same strength, the same route of administration and the same dosage form. Under the generic substitution laws in effect in all fifty states and the District of Columbia, a pharmacy may not substitute a generic drug for a brand name drug unless the generic is AB-rated. (Id. at ¶¶ 35-37, 47.)

         B. REMS/SSRS

         Under the FDA Amendments Act of 2007, the FDA has the authority to require drug manufacturers to conduct a Risk Evaluation and Mitigation Strategy (“REMS”). 21 U.S.C. § 355-1. REMS is a process by which a drug's manufacturer demonstrates to the FDA that the drug's benefits outweigh its risks. A REMS may include a “medication guide, communication plans, patient package inserts, potential restrictions regarding individuals or entities that may dispense the drug, and other similar illustrations.” (Id. at ¶ 38.)

         If the FDA requires a REMS for a brand name drug, any subsequent generic manufacturer who files an ANDA must join with the brand manufacturer to create a “single, shared” REMS (“SSRS”). The SSRS process is intended to minimize the burden on the healthcare delivery system of having multiple REMS programs. (Id.)

         The statute also authorizes the Secretary of the Department of Health and Human Services to allow a waiver from the SSRS requirement and allow a generic applicant to create a “waiver-based” REMS in certain circumstances, including when “the burden of creating a single, shared system outweighs the benefit of a single, system. . . .” 21 U.S.C. 355-1(i)(1)(B)(i). An ANDA will not be approved until the SSRS process has been approved or a waiver request has been granted and a waiver-based REMS has been approved. (Id.)

         C. Citizen Petitions

         FDA regulations allow anyone to file a “Citizen Petition” requesting that the FDA take some form of administrative action. 21 U.S.C. § 355(q) addresses Citizen Petitions that request any action related to an ANDA - these petitions are commonly referred to as “505(q) petitions.” The FDA must take final agency action on a 505(q) petition within 180 days of the petition's submission date. (Id. at ¶¶ 39, 41.)

         21 U.S.C. § 355(q)(1)(E) provides that “[i]f the Secretary determines that a [Citizen] [P]etition . . . was submitted with the primary purpose of delaying the approval of an [ANDA] and the petition does not on its face raise valid scientific or regulatory issues, the Secretary may deny the petition at any point based on such determination.” The FDA, however, has never summarily denied a Citizen Petition under this provision. (Id. at ¶ 41.)

         II. ALLEGATIONS CONTAINED IN AMNEAL'S COMPLAINT[4]

         The facts alleged in the Complaint are as follows: Suboxone, which contains the active ingredients Buprenorphine and Naloxone “BPN/NLX, ” is used for the treatment of opioid dependence. (Id. at ¶ 2.) Suboxone was the first opioid dependence treatment on the market that could be prescribed by a doctor for use in a patient's home. (Id. at ¶ 50.)

         The FDA approved Indivior's NDA for Suboxone tablets in 2002. Although Indivior did not hold a patent for Suboxone tablets, it was able to obtain a seven-year period of exclusivity from the FDA because Suboxone was found to be an orphan drug.[5] Indivior's period of exclusivity for Suboxone tablets was scheduled to expire on October 8, 2009. (Id. at ¶ 56.)

         Shortly before the expiration of Suboxone tablets' orphan drug exclusivity, Indivior filed an NDA for the film dosage form of Suboxone, which is a strip that dissolves under a patient's tongue. The FDA approved the NDA on August 30, 2010. Indivior holds several patents purportedly covering Suboxone film which do not expire until 2030. (Id. at ¶¶ 57, 3.)

         Amneal contends that Indivior successfully pursued a scheme to avoid competition with generic Suboxone by delaying generic entry and hindering the ability of generic manufacturers to compete after entry. Specifically, Amneal alleges that Indivior took several actions to delay generic entry, including the following which are relevant to the instant motion: (a) deceptive conduct which thwarted the development of a SSRS for generic Suboxone and delayed the issuance of a waiver based REMS; and (b) submission of a sham Citizen Petition on the eve of the SSRS waiver request that had the intended effect of further stalling generic entry. (Id. at ¶¶ 4-13, 64-65.)[6]

         A. REMS/SSRS

         When the FDA approved Indivior's ANDA in October of 2002, it required Indivior to implement a “comprehensive risk management program, or RiskMAP. The RiskMAP, a precursor to the REMS program, was designed to “deter abuse and diversion from [Suboxone's] legitimate use, develop instructions to physicians regarding proper use of these drugs, require close monitoring of drug distribution channels, and require child-resistant packaging.” Indivior implemented and administered the RISKMAP. (Id. at ¶¶ 66-67.)

         In August of 2009, the FDA ordered Indivior to replace the RiskMAP with a REMS for its Suboxone tablet and film products. On August 30, 2010, the FDA approved the REMS Indivior submitted for Suboxone film. On December 22, 2011, the FDA approved the REMS Indivior submitted for Suboxone tablets. (Id. at ¶ 68.)

         On January 6, 2012, the FDA issued a letter to Amneal and all other sponsors of pending AND As related to generic Suboxone tablets. Therein, the FDA stated that before the “FDA can continue review of your ANDA you must submit a proposed REMS as an amendment to your ANDA.” The FDA further stated that a “single, shared system to implement the REMS program is needed” and directed the generic sponsors to contact Indivior regarding the development of the SSRS. The FDA indicated that it “expected the SSRS to be completed by May 6, 2012.” (Id. at ¶¶ 70-71.)

         Over the next six months, the generic sponsors, including Amneal, attempted to collaborate with Indivior. Despite its representation to the FDA and the generic sponsors that it was willing to cooperate with the SSRS process, Indivior never complied with the SSRS mandate. (Id. at ¶ 73.) Initially, Indivior denied that it received any correspondence from the FDA regarding the SSRS and also refused to cooperate with the process until “instructed to do so by the FDA.” Indivior also declined to participate in weekly meetings held by the generic sponsors. On March 9, 2012, Indivior entered into a confidentiality agreement with the generic sponsors, “falsely leading them to believe that [Indivior] would cooperate in the development of the SSRS.” (Id. at ¶¶ 74-76.)

         On March 19, 2012, Indivior's counsel sent the generic sponsors a list of “legal and governance” issues that had to be resolved before Indivior would be willing to engage in any substantive conversations regarding the SSRS. One such demand was that the generic sponsors agree to share the cost of any future product liability costs incurred by Indivior in connection with the SSRS. (Id. at ¶¶ 77-78.)

         On April 2, 2012, Indivior finally agreed to meet in person with the generic sponsors “but only through its lawyers.” However, once at the meeting, Indivior's representative refused to engage in any substantive conversations or share any non-public information or even a description of its REMS program until all legal and governance issues were resolved. (Id. at ¶ 79.)

         In May of 2012, after months of unsuccessful discussions with Indivior, the generic sponsors requested a meeting with the FDA to discuss the delays and impasse caused by Indivior's conduct. On June 18, 2012, the FDA met with the generic sponsors and Indivior. The FDA agreed to a compromise that would allow the generic sponsors and Indivior to develop an entirely new SSRS comparable to Indivior's existing REMS, but which would not use or rely upon Indivior's allegedly proprietary information contained in that REMS. At this meeting, Indivior represented that it would cooperate with the generic sponsors to develop this new “compromise” SSRS. The FDA stated that it expected the new SSRS to be “up and running . . . by August 17, 2012.” (Id. at ¶ 80.)

         Despite renewing its professed commitment to cooperate, Indivior continued to develop “new excuses” to delay the development of the SSRS. For example, Indivior refused to sign a “governing program agreement” unless Indivior was given veto authority or a super-majority vote for all issues relating to the SSRS administration process. Indivior also demanded that all generic sponsors agree to ...


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