Mergers & Antitrust Law News

Teva Picked as Bellwether Target in Generic Drug Price-Fix Case

July 14, 2020, 10:15 PM

Teva Pharmaceutical Industries Ltd. will be the focus of the first trial over an alleged “overarching” industrywide conspiracy to fix generic prices, while bellwether trials involving schemes to fix three specific drug prices will advance along a separate track, a federal judge in Philadelphia ruled Tuesday.

The procedure will test the case’s fitness for class action treatment “as to several individual drug conspiracies, and also explore the merits of an overarching conspiracy case,” Judge Cynthia M. Rufe wrote. “This is a balanced approach that takes into consideration the different types of cases in the MDL.”

The sprawling multidistrict lawsuit, consolidated in the U.S. District Court for the Eastern District of Pennsylvania, accuses the world’s top generic drugmakers of colluding to pump up prices across the board.

It began with claims involving the heart rhythm drug digoxin and the antibiotic doxycycline but grew to include a wide range of lawsuits involving 200 generic drugs as well as allegations of industrywide conspiracies led by Teva and Heritage Pharmaceuticals Inc.

It now includes antitrust suits by large health-care companies, an enforcement action by nearly every state attorney general, and proposed class actions on behalf of drug distributors, retail pharmacies, and “end payers” like insurers and pension funds. There’s also a separate federal price-fixing probe.

The state AG claims of a Teva-led “overarching conspiracy” should go first along one track, Rufe held Tuesday. Cases focused on the eczema drug clobetasol, the antidepressant clomipramine, and the cholesterol reducer pravastatin will move forward along another track, the judge said.

Rufe rejected the pharmaceutical companies’ argument in favor of starting with the “Heritage-centric” case—which, like the Teva lawsuit, also includes other drugmaker defendants.

The four actions adequately represent the diverse types of claims involved in the case, even if there’s “no right answer” that would perfectly encapsulate the complex allegations, Rufe said.

Moreover, they were all filed directly in her court, rather than having been transferred to the MDL from somewhere else, the judge noted. That will allow her to dodge thorny questions about the jurisdiction of courts hearing MDLs to oversee bellwether trials of claims first asserted elsewhere, she said.

Rufe also rejected the contention that the Teva-centric lawsuit is “too massive and too complicated” compared to the Heritage case.

“Defendants’ proposal is not unreasonable, but the court is not persuaded that it is a preferable way forward or that it will advance the litigation as effectively,” she wrote.

The case is In re Generic Pharms. Pricing Antitrust Litig., E.D. Pa., No. 16-md-2724, 7/14/20.

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com

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