Dan Churney Aug. 22, 2016, 9:28am

A Chicago federal judge has chopped a few counts from a huge putative class-action suit – based on laws of various states, including Illinois – accusing the maker of the prescription pain killer Opana of improperly keeping the price of its product high by paying off another pharmaceutical company to delay the release of a generic version of the drug.  

The Aug. 11 decisions were rendered by U.S. District Judge Harry Leinenweber. Some of the decisions favored Pennsylvania-based Endo Health Solutions and California-based Impax Laboratories, while others favored insurance providers suing the companies.  

An antitrust lawsuit, involving plaintiffs from more than 30 states, against Endo and Impax, was consolidated in 2014 in Chicago federal district court. A number of the plaintiffs are insurers. 

The suit alleges Endo tried to block competition to its pain killer Opana ER, agreeing in 2010 to end its patent infringement litigation against Impax – a generic competitor – by paying Impax millions of dollars to keep its generic drug off the market for more than two years, based on future sales and other contingencies. The U.S. Supreme Court held in a 2013 case that such arrangements, termed “reverse payments,” may constitute restraint of trade when the payments are “large and unjustified.” 

On Feb. 10, Judge Leinenweber granted defendants’ motion to toss the insurers’ consumer protection and unjust enrichment claims, which were filed under the laws of several states where certain insurers are located. Leinenweber found the insurers did not sufficiently present claims in accordance with those laws. 

However, Leinenweber allowed the insurers to file an amended complaint. In turn, defendants again argued for dismissal. Leinenweber killed off a couple of the suit’s counts, but gave plaintiffs permission to again file new pleadings for those counts. 

One of defendants’ contentions was that Illinois and Rhode Island laws concerning claims of unjust enrichment only allow lawsuits by the direct purchaser of an overcharged service or product. Leinenweber agreed, saying insurers did not directly buy Opana, so they cannot maintain an unjust enrichment claim for those states. 

On the other hand, laws in Missouri, Florida, Massachusetts and Pennsylvania do allow a plaintiff farther down the line of distribution to allege they were a victim of unjust enrichment, so Leineweber refused to dismiss claims from those states.

Defendants also argued that in certain states, unjust enrichment does not apply if defendants did not receive direct benefit, but Leinenweber pointed out the insurers allege they bought drugs at “supracompetitive” prices, with the extra money they paid passed on to defendants. As a consequence, Leinenweber declined to toss defendants’ motion to dismiss in seven states. 

Defendants scored a victory in the case of California, where unjust enrichment actions are prohibited if other legal remedies are available. Leinenweber found plaintiffs have other legal remedies. 

In Iowa, defendants argued the insurers are “too remote” from the alleged over charging, but Leinenweber disagreed. The judge also refused to go along with defendants’ argument that in New Hampshire, an enrichment claim cannot stand unless defendant committed “unconscionable or inequitable” conduct; Leinenweber said it’s possible defendants engaged in such behavior. 

Endo is defended by the Philadelphia-based firm of Dechert LLP, which has a Chicago office. 

Impax is defended by the Chicago firm of Winston & Strawn, and Venable LLP of Washington D.C. 

A number of firms are representing plaintiffs.

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Organizations in this Story

Dechert LLP
35 West Wacker Drive
Chicago, IL 60601

Winston and Strawn LLP
35 W Upper Wacker Dr
Chicago, IL 60601

Venable LLP
750 E Pratt St
Baltimore, MD 21202

Endo Pharmaceuticals, Inc.
1400 Atwater Dr
Malvern, PA 19355

3735 Castor Ave
Philadelphia, PA 19124

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