Nexium Buyers Win Class Cert In AstraZeneca Antitrust MDL

Law360 reports on Hilliard & Shadowen's victory in class certification battle in Nexium case:

By Kurt Orzeck

Law360, Los Angeles (November 14, 2013, 9:51 PM ET) -- A Massachusetts federal judge certified a class of Nexium end-buyers on Thursday who accused AstraZeneca PLC and others of violating antitrust laws by delaying a generic version of AstraZeneca’s heartburn drug, ruling the class met adequacy and predominance requirements.

In the multidistrict litigation, the judge certified a damages class consisting of an unidentified number of individual consumers, third-party payors, union plan sponsors and insurance companies that bought or provided reimbursements for Nexium in more than 20 states and the District of Columbia. The class period will last from Apr. 14, 2008, until the alleged anticompetitve effects of the companies' unlawful conduct end, the judge said.

The Nexium buyers allege that AstraZeneca established market power and used that power to harm competition when it entered into agreements with generic-drug makers Ranbaxy Inc., Teva Pharmaceutical Industries Ltd. and Dr. Reddy’s Laboratories Ltd.

While the defendants alleged that varying state laws prevented the proposed members of the damages class from meeting the predominance requirement, U.S. District Judge William G. Young disagreed.

“The [end-payors] provide an overview of the relevant state antitrust statutes, highlighting the substantial similarities in the language between state and federal antitrust provisions,” he said.

The judge, however, denied certification to a class of end-payors seeking injunctive relief for the alleged antitrust violations, saying they were trying “to sweep in” damages claims of $2.3 billion under the guise of injunctive relief.

AstraZeneca's blockbuster drug is used to treat gastroesophageal reflux disease and is the second-biggest selling drug worldwide, behind Pfizer's cholesterol medication Lipitor, court filings said.

The plaintiffs accused AstraZeneca and the three generic-drug makers of unreasonable restraint of trade and monopolization. The end-payors claimed that certification of their damages class was just, because they all paid supracompetitive prices for Nexium and suffered the same type of injury.

The defendants replied that other courts have treated third-party payors and consumers as fundamentally different groups, meaning the class certification requirements couldn't be met. Besides, some of the third-party payors were uninjured due to AstraZeneca's issuing of rebates covering up to 50 percent of Nexium's retail purchase price, the defendants said.

But Judge Young found that while the rebates may have shielded some of the third-party purchasers from overcharges, the defendants hadn't proven that any of the purchasers were uninjured by the supracompetitive pricing. Furthermore, individualized proof of injury isn't required at this point in the litigation, according to Thursday's ruling.

The judge also noted that, while the rebates totaled $185 million, that was only a fraction of AstraZeneca's $27.4 billion in total Nexium sales from 2008 to 2013.

Judge Young also disagreed with the defendants' contention that union plan sponsor plaintiffs weren't suited to adequately represent the class, because they would allegedly try to maximize their own recovery. He held that potential issues with the damages allocation were weak indicators of any existing conflicts of interest.

Judge Young has yet to rule on class certification for the class of direct purchasers. The trial is due to begin in March.

An AstraZeneca spokeswoman told Law360 on Friday that the company disagrees with the judge's decision and is considering an appeal.

An attorney representing the direct purchaser class declined comment Thursday.

Attorneys for other plaintiffs Ranbaxy, Teva and Dr. Reddy’s didn't immediately respond to requests for comment late Thursday.

The plaintiffs are represented by Berman DeValerio Dahlman & Gross LLP, Hilliard & Shadowen LLC, Cohen Milstein Sellers & Toll PLLC, Wexler Wallace LLP, Berger & Montague PC, Taus Cebulash & Landau LLP, Carella Byrne Cecchi Olstein Brody & Agnello PC, and Hagens Berman Sobol Shapiro LLP, among others.

AstraZeneca is represented by Covington & Burling LLP, Williams & Connolly LLP, andMcCarter & English LLP. Ranbaxy is represented by Venable LLP and Minerva Law PC. Teva is represented by Mintz Levin Cohn Ferris Glovsky & Popeo PC. Dr. Reddy’s is represented by Budd Larner PC.