By Michael Lipkin for Law360.com
Continuing recent efforts to be part of pending pay-for-delay cases, a group of grocery chains including Walgreen Co. on Thursday filed joint complaints in Illinois and Pennsylvania accusing the makers of opioid pain medication Opana ER® and acne treatment Solodyn® of standing in the way of generic competition.
The group, which includes The Kroger Co., Safeway Inc., HEB Grocery Co. LP and Albertstons LLC, claims that Endo Pharmaceuticals Inc. paid Impax Laboratories Inc. more than $112 million to delay a generic version of Endo's Opana®, and that Medicis Pharmaceutical Corp. sought to keep a generic version of its Solodyn® off the market.
The Opana® complaint, along with another suit earlier this month involving Lidoderm, were both filed as part of ongoing multidistrict litigation. The Solodyn® complaint and suit filed Monday over generic Aggrenox both echoed allegations in pendings MDLs, but were filed in states that were not overseeing the consolidated actions.
In all four suits, the retailers all sued as assignees of pharmaceutical wholesalers that bought the drugs and resold them to the stores. The wholesalers are Cardinal Health Inc., AmerisourceBergen Drug Corp. and McKesson Corp.
The chains accuse Endo and subsidiary Penwest Pharmaceuticals Co. of organizing a scheme in which Endo paid Impax to delay for more than two years its cheaper, generic version of the extended-release oxymorphone hydrochloride painkiller. They note that they are included in the proposed class definition in the Opana MDL.
"This large, unjustified reverse payment had no rational connection to, and far exceeds, any approximation of the costs of continuing the patent litigation that was in the middle of trial at the time the agreement was signed," the stories said. "Other than delaying the launch of its generic Opana ER®, Impax was not required to perform any service at all in exchange for the more than $102 million cash payment."
Six putative class actions over Opana® were consolidated into an MDL based in Illinois in December, all alleging that Endo's deal to push back the marketing of Impax's generic painkiller form June 2010 to January 2013 allowed Endo to switch the market for Opana ER to a new formulation of the drug, called Opana ER CRF.
The purchasers claim that the new formulation furthered the anti-competitive scheme because the market for a generic Opana ER has lost steam with the introduction of the new version and Opana ER CRF would not immediately have a generic substitute.
Endo's new formulation was supposedly more crush-resistant, formed in response to the company's voluntary recall of the original version of Opana ER in May 2012 after determining that it was susceptible to misuse and abuse by people crushing and snorting the pills.
The chains also alleged that Medicis improperly claimed it was entitled to have the U.S. Food and Drug Administration delay approval of abbreviated new drug applications for generic versions of Solodyn, and that the pharmaceutical company had executed unlawful deals with competitors to keep them from bringing versions of the medication to market. A dozen proposed class actions were consolidated in Massachusetts federal court last February.
Impax received a $102 million cash payment in April 2013 and a $10 million up-front payment when the deal was signed, according to the MDL plaintiffs. The pact also included an additional obligation by Endo to pay Impax $30 million under the guise of a development and co-promotion agreement for Impax's yet-to-be-approved product to treat Parkinson's disease, making the potential value of the Endo deal about $142 million, according to the suits.
Walgreen and others said receipt of the $102 million payment was tied to sales of Opana ER the quarter before Impax's launch, ensuring compensation if Opana ER CRF caused sales of Opana ER to fall below a certain threshold. If sales remained strong, Impax would still profit through its generic versions, according to the complaint.
"Impax made sure that it would be well paid for staying off the market, no matter what happened during the two and a half years of delay, "the stores said.
According to the MDL plaintiffs, the FDA gave Impax approval for its generic oxymorphone hydrochloride drug in June 2010 for 5-, 10-, 20- and 40-mg dosages. A month later, the agency also greenlighted a 30-mg version.
Endo then embarked on a strategy to block generics competitors including Impax, Sandoz Inc. and Roxane Laboratories Inc. through litigation from creating their extended-release versions of oxymorphone hydrochloride, the complaints said.
Endo ended up dropping its suit against Impax, opting instead to enter into an anti-competitive agreement, the complaints alleged. A 180-day exclusivity window for Impax blocked the other companies from launching generic versions because the FDA doesn't approve drug applications until that window is closed, Walgreen said.
Thursday's complaint includes claims for monopolization, attempt to monopolize and conspiracy in restraint of trade.
Representatives for the parties did not immediately respond Thursday to requests for comment.
The plaintiffs are represented by David Lesht of Law Offices of Eugene M. Cummings PC and Richard Alan Arnold, Scott E. Perwin, Lauren C. Ravkind and Anna T. Neil of Kenny Nachwalter PA.
Counsel information for the defendants was not immediately available.
The cases are Walgreen Co. et al. v. Endo Health Solutions Inc. et al., case number 1:15-cv-02563, in the U.S. District Court for the Northern District of Illinois, and Walgreen Co. et al. v. Medicis Pharmaceutical Corp., case number 1:15-cv-00611, in the U.S. District Court for the Middle District of Pennsylvania.
--Additional reporting by Aaron Vehling, Vin Gurrieri and Linda Chiem. Editing by Philip Shea.
Original Source: Law360.com
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