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
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.