In re Namenda Direct Purchaser Antitrust Litigation

BRIEF re: 230 MOTION for Leave to File Sur-reply Memorandum of Law in Support of Motion for Partial Summary Judgment on Count Five.

S.D.N.Y.May 13, 2017

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK IN RE NAMENDA DIRECT PURCHASER ANTITRUST LITIGATION No. 15-cv-7488-CM DIRECT PURCHASER CLASS PLAINTIFFS’ SUR-REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT ON COUNT FIVE FILED UNDER SEAL Case 1:15-cv-07488-CM-JCF Document 241 Filed 05/13/17 Page 1 of 10 i TABLE OF AUTHORITIES AstraZeneca AB v. Impax Labs., Inc. (In re Omeprazole Patent Litig.), 490 F. Supp. 2d 368 (S.D.N.Y. 2007) .................................................................................. 1, 2 Palmer v. BRG of Ga., Inc., 4498 U.S. 46 (1990) .................................................................................................................. 4 Ranbaxy Labs., Ltd. v. Burwell 82 F. Supp. 3d 159 (D.D.C. 2015) ............................................................................................. 3 FEDERAL STATUTES 21 U.S.C. § 355 ...................................................................................................................1, 3, 5, 6 Case 1:15-cv-07488-CM-JCF Document 241 Filed 05/13/17 Page 2 of 10 Forest1 has repeatedly misstated the facts, the law and Direct Purchaser Class Plaintiffs’ (“Plaintiffs”) arguments regarding pediatric exclusivity and continues to do so in its May 1, 2017 letter brief. Forest contends that “Plaintiffs argue that . . . Forest never truly obtained pediatric exclusivity.” Forest’s May 1 letter brief at 1, 3. To the contrary, Plaintiffs have never disputed that Forest obtained pediatric exclusivity,2 only that pediatric exclusivity did not prevent the 7 generic companies3 from launching. Forest’s misdirection is cover for the fundamental flaw in its argument. Plaintiffs’ assertion is not that Forest was not properly awarded pediatric exclusivity. It is that “the effect of the grant of pediatric exclusivity depends on the type of certification included in the ANDA.” In re Omeprazole Patent Litigation, 490 F. Supp. 2d 368, 372 (S.D.N.Y. 2007). Under the express language of the pediatric exclusivity statute for a generic company like the 7 generic companies that were sued after filing Paragraph IV certifications,4 Forest’s receipt of pediatric exclusivity would not prevent the 7 generic companies from coming to market unless there was a court 1 “Forest” refers to defendant refers to Forest Laboratories, LLC. “Defendants” refers to Forest, Actavis, PLC, Merz GMBH & Co. KGAA, Merz Pharma GMBH & Co. KGAA, and Merz Pharmaceuticals GMBH. 2 Direct Purchaser Class Plaintiffs’ Responses and Objetions to Forest’s Counter-Statement of Material Facts Not in Dispute with Respect to Count Three, Response No. 116. 3 The seven generic companies were: Interpharm Holdings, Inc. and Interpharm, Inc. (together, “Interpharm”) (whose interests were acquired by a wholly owned subsidiary of Amneal Pharmaceuticals, LLC (“Amneal”)); Dr. Reddy’s Laboratories Ltd. and/or Dr. Reddy’s Laboratories, Inc. (together, “Dr. Reddy’s”); Lupin Pharmaceuticals, Inc. (“Lupin”); Mylan Pharmaceuticals, Inc. (“Mylan”); Orchid Chemicals & Pharmaceuticals Ltd. (“Orchid”); Sun India Pharmaceuticals Industries, Ltd. (“Sun”); and Teva Pharmaceuticals USA, Inc. (“Teva”). 4 “[I]f the [brand] drug is the subject of a listed patent for which a [Paragraph IV] certification has been submitted…and in the patent infringement litigation resulting from the [Paragraph IV] certification the court determines that the patent is valid and would be infringed, the period during which an [ANDA] may not be approved…shall be extended by a period of six months after the date the patent expires.” 21 U.S.C. § 355a(c)(1)(B)(ii). Case 1:15-cv-07488-CM-JCF Document 241 Filed 05/13/17 Page 3 of 10 2 determination that the ’703 patent was valid and infringed as to each of the 7 generic companies. This is because each of the 7 generic companies obtained FDA final approval prior to the expiration of the ’703 patent and as to these 7 generic companies, no such court determination of validity and infringement ever occurred. Thus, pediatric exclusivity was not a barrier to market entry of the 7 generic companies because they filed and maintained Paragraph IV certifications. This point was discussed extensively in In re Omeprazole Patent Litigation. There Judge Jones stated that “[o]nce an application is finally approved, the applicant is no longer under an obligation to amend its certification” so “the rationale behind automatic conversion of a Paragraph IV certification to a Paragraph II certification [upon patent expiry] does not apply.” 490 F. Supp. 2d at 380. Forest’s reference to is not helpful to its cause but actually supports Plaintiffs’ position. requested and received FDA final approval prior to the expiration of the ’703 patent and that final approval was not rescinded, revoked or altered in any way. See Direct Purchaser Class Plaintiffs’ Statement of Material Facts in Support of Their Motion for Partial Summary Judgment on Count Three, ¶¶ The only thing that prevented launch was their respective agreements with Forest, not the grant of pediatric exclusivity to Forest for Namenda. 5 Forest’s May 1 letter brief makes no mention of the other five of the 7 generic companies. Four of those five had FDA final approval prior to Forest’s receipt of pediatric exclusivity in June 2014. See Direct Purchaser Class Plaintiffs’ Statement of Material Facts in Support of Their Motion for Partial Summary Judgment on Count Three, Case 1:15-cv-07488-CM-JCF Document 241 Filed 05/13/17 Page 4 of 10 3 Forest repeatedly argues that the FDA approvals of the 7 generic companies “were not truly ‘final’” because they “did not truly clear the way for [the 7 generic companies to launch].” Forest’s May 1 letter brief at 1. However, there is no such thing as an FDA final approval that is not “truly final.” Forest does not cite to a single statute, regulation, case, or statement by the FDA that supports its argument. The FDA’s position on the meaning of final approval is clear. The FDA defines “Approval Letter” as “an official communication from FDA to a drug application . . . sponsor that allows the commercial marketing of the product.” See definition of “Approval Letter” in FDA’s Drugs@FDA Glossary, available at: https://www.accessdata.fda.gov/scripts /cder/daf/index.cfm?event=glossary.page. The case law is similarly straightforward. As the District Court for the District of Columbia in Ranbaxy Labs., Ltd. v. Burwell stated, “Once an ANDA has been granted final approval, the manufacturer may begin selling the drug in interstate commerce. See 21 U.S.C. § 355(a).” 82 F. Supp. 3d 159, 169 (D.D.C. 2015). As for any potential impact the expiration of a patent would have on the approval status of an applicant in light of pediatric exclusivity, the FDA has addressed this issue head on: “the first [to file applicants] approved prior to the start of pediatric exclusivity [e.g., the 7 generic companies] do[] not need to change [their Paragraph IV certifications] upon patent expiry and pediatric exclusivity does not affect the approval of the first applicant[s’] ANDA.” FDA, Draft Guidance for Industry – 180-Day Exclusivity: Questions and Answers (Jan. 2017) answering Question 20 at 13-14, available at http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM 536725.pdf. To try to reconcile this problem, Forest argues that the FDA’s issuance of final approval to the 7 generic companies was somehow conditional, i.e., “not truly ‘final,’” because of the existence of the settlements in which the parties agreed to an entry date that came after the expiration of the Case 1:15-cv-07488-CM-JCF Document 241 Filed 05/13/17 Page 5 of 10 4 ’703 patent. Forest’s May 1 letter brief at 1-2. The FDA did no such thing nor could it in light of the applicable law and regulations. Forest’s statement, however, effectively concedes that it is the settlement agreements between Forest and the 7 generic companies that received FDA final approval before the ’703 patent expired that barred the 7 generic companies from launching after obtaining final approval, not Forest’s receipt of pediatric exclusivity or any other statute or regulation. As stated in Plaintiffs’ opening brief, an agreement between competitors not to compete that is not pursuant to the operation of a statutory exemption is a per se violation of antitrust laws. See Palmer v. BRG of Ga., Inc., 498 U.S. 46, 48-50 (1990) (per curium). Forest’s reliance on “the stipulated judgments” entered in the patent litigation is also misplaced. Forest’s May 1 letter brief at 1. As the stipulated judgments themselves state, “No decision of the [’703 patent court] has been obtained by either party regarding” validity and infringement and that “[a]ll other claims, defenses and counterclaims…are hereby dismissed, without prejudice.” Direct Purchaser Class Plaintiffs’ Responses and Objections to Forests’ Counter-Statement of Material Facts Not in Dispute with Respect to Count Three, ¶¶ 123 (Amneal); 133 (Dr. Reddy’s); 139 (Lupin); 144 (Mylan); 153 (Sun); 158 (Teva). This was not by accident. But if the 7 generic companies were required to acknowledge that the ’703 patent was valid and infringed as if Forest actually won the litigation, then the 7 generic companies would have been required by statute to amend their Paragraph IV certification and thereby convert to a Paragraph III certification. This would result in the 7 generic Case 1:15-cv-07488-CM-JCF Document 241 Filed 05/13/17 Page 6 of 10 5 companies not receiving FDA final approval until 6 months after the patent expired without a waiver of the exclusivity by Forest. See 21 U.S.C. § 355(j)(5)(B)(iii)(II)(bb). By operation of the pediatric exclusivity statute, the only way for the 7 generic companies, each of which maintained their Paragraph IV certifications and received final approval prior to patent expiry, to be barred from marketing generic Namenda IR by Forest’s pediatric exclusivity after receiving FDA final approval was by a court determination that the ’703 patent was valid and would be infringed as to each Paragraph IV filer. 21 U.S.C. § 355a(c)(1)(B)(ii). There was no court determination because Forest prevented such a determination by settling with each of the 7 generic companies in the manner that they settled. As for the third-party documents purportedly supporting Forest’s arguments, they actually support Plaintiffs’ position on the impact of pediatric exclusivity on FDA final approval for . Plaintiffs agree “that the FDA itself knew about the settlements and evaluated pediatric exclusivity with the parties’ agreements in mind.” Forest’s May 1 letter brief at 2. The context of this evaluation is the key though. The FDA was aware that if did not have FDA final approval prior to the expiration of the ’703 patent, they would have to wait to obtain final approval until after the pediatric exclusivity expired without a waiver of that exclusivity provided by Forest. See Forest’s May 1 letter brief at Ex. C, Paragraph IV certifications automatically convert from Paragraph IV to Paragraph II in those applications without FDA final approval prior to patent Case 1:15-cv-07488-CM-JCF Document 241 Filed 05/13/17 Page 7 of 10 Case 1:15-cv-07488-CM-JCF Document 241 Filed 05/13/17 Page 8 of 10 7 Dan Litvin Kimberly M. Hennings 88 Pine Street, 10th Floor New York, NY 10005 Tel: (212) 398-0055 Fax: (212) 764-6620 dlitvin@garwingerstein.com SMITH SEGURA & RAPHAEL, LLP David C. Raphael, Jr. Erin R. Leger 3600 Jackson Street, Suite 111 Alexandria, LA 71303 Tel: (318) 445-4480 Fax: (318) 487-1741 draphael@ssrllp.com ODOM & DES ROCHES, L.L.C. Stuart E. Des Roches 650 Poydras Street, Suite 2020 New Orleans, LA 70130 Tel: (504) 522-0077 Fax: (504) 522-0078 stuart@odrlaw.com HEIM PAYNE & CHORUSH, LLP Russ Chorush Miranda Jones 600 Travis, Suite 6710 Houston, TX 77002 Tel: (713) 221-2000 Fax: (713) 221-2021 rchorush@hpcllp.com Counsel for J M Smith Corporation d/b/a Smith Drug Company and the Proposed Class FARUQI & FARUQI, LLP Elizabeth A. Silva (No. ES-2011) 685 Third Avenue, 26th Floor New York, NY 10017 Tel: (212) 983-9330 Fax: (212) 983-9331 esilva@faruqilaw.com Case 1:15-cv-07488-CM-JCF Document 241 Filed 05/13/17 Page 9 of 10 8 FARUQI & FARUQI, LLP Peter Kohn Joseph T. Lukens Neill W. Clark 101 Greenwood Avenue, Suite 600 Jenkintown, PA 19046 Tel: (215) 277-5770 Fax: (215) 277-5771 pkohn@faruqilaw.com jlukens@faruqilaw.com nclark@faruqilaw.com BERGER & MONTAGUE, P.C. David F. Sorensen 1622 Locust Street Philadelphia, PA 19103 Tel: (215) 875-4675 Fax: (215) 875-4604 dsorensen@bm.net Counsel for Rochester Drug Co-Operative, Inc. and the Proposed Class Case 1:15-cv-07488-CM-JCF Document 241 Filed 05/13/17 Page 10 of 10