New York et al. v. Cephalon, No. 2:16-cv-04234 (E.D. Pa. Aug. 4, 2016)
In May 2015, the FTC settled a “pay-for-delay” suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations. In August 2016, forty-eight states filed suit in the Eastern District of Pennsylvania against Cephalon alleging anticompetitive conduct by Cephalon to protect the profits it earned from having a patent-protected monopoly on the sale of its landmark drug, Provigil. According to the complaint, Cephalon’s conduct delayed generic versions of Provigil from entering the market for several years. The complaint alleged that as patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable. Before it was declared invalid, Cephalon was able to use the patent to delay generic competition for nearly six additional years by filing patent infringement lawsuits. Cephalon settled those lawsuits by paying competitors to delay sale of their generic versions of Provigil until at least April 2012. Consumers, states, and others paid millions more for Provigil than they would have had generic versions of the drug launched by early 2006, as expected. A settlement was filed with the complaint, which includes $35 million for distribution to consumers who bought Provigil.
Massachusetts et al. v. Koninklijke Ahold N.V., No. 1:16-cv-01412 (D.D.C., July 25, 2016)
Plaintiff states and FTC filed suit challenging the merger of Ahold and Delhaize, supermarket chains operating in the United States as Stop & Shop and Hannafords. According to the complaint, supermarkets operated by Ahold and Delhaize compete closely for shoppers based on price, format, service, product offerings, promotional activity, and location. Without a remedy, the merger would eliminate direct supermarket competition to the detriment of consumers in these local markets. As a result, the merger would increase the likelihood that the combined company could unilaterally exercise market power, and that the remaining competitors could coordinate their behavior to raise prices. the parties agreed to divest 76 supermarkets in the plaintiff states. The settlement also required prior notification of future supermarket purchases and $300,000 in attorneys fees and costs.
United States et al. v. Aetna et. al., No. 1:16-cv-01494 (D.D.C. July 21, 2016)
U.S. DOJ and plaintiff states sued to block the merger of two of the country’s largest health insurers. According to the complaint, alleges that their merger would substantially reduce Medicare Advantage competition in more than 350 counties in 21 states, affecting more than 1.5 million Medicare Advantage customers in those counties. Before seeking to acquire Humana, Aetna had pursued aggressive expansion in Medicare Advantage. Aetna, the nation’s fourth-largest Medicare Advantage insurer by membership, has nearly doubled its Medicare Advantage footprint over the past four years. Humana is the nation’s second-largest Medicare Advantage insurer by membership. The lawsuit also alleges that Aetna’s purchase of Humana would substantially reduce competition to sell commercial health insurance to individuals and families on the public exchanges in 17 counties in Florida, Georgia and Missouri, affecting more than 700,000 people in those counties. The lawsuit alleges that by buying Humana, Aetna would eliminate one of its strongest and most capable competitors in these markets. The district court granted the injunction, rejecting the parties arguments that the Medicare Advantage and Medicare programs were competing products that constrained one another’s prices, and noting that Aetna’s exit from several markets, allegedly because of the Affordable Care Act, appeared to be designed to eliminate a problem with the merger, rather than being an unrelated business decision.
United States et al. v. Anthem et al., No. 1:16-cv-01493 (D.D.C., July 21, 2016)
The US and plaintiff states sued to block the merger of two of the country’s largest health insurers. The complaint alleges that their merger would substantially reduce competition for millions of consumers who receive commercial health insurance coverage from national employers throughout the United States; from large-group employers in at least 35 metropolitan areas, including New York, Los Angeles, San Francisco, Denver and Indianapolis; and from public exchanges created by the Affordable Care Act in St. Louis and Denver. The complaint also alleges that the elimination of Cigna threatens competition among commercial insurers for the purchase of healthcare services from hospitals, physicians and other healthcare providers. According to the complaint, the merger would eliminate substantial head-to-head competition in all these markets, and it would remove the independent competitive force of Cigna, which has been a leader in the industry’s transition to value-based care. the court granted the injunction. Anthem appealed to the DC Circuit, which affirmed the district court.
Florida et al. v. Dollar Tree, Inc., No. 1:15-cv-01052 (D.D.C. July 2, 2015)
Eighteen plaintiff states and the FTC challenged the merger of Dollar Tree, the largest chain of “dollar” stores (deep discount stores) and Family Dollar Stores, the nation’s third largest dollar store chain. The complaint claimed the proposed acquisition would substantially lessen competition in numerous markets by: (1) eliminating direct and substantial competition between Dollar Tree and Family Dollar; and (2) increasing the likelihood that Dollar Tree will unilaterally exercise market power. This, according to the complaint, would violate Section 7 of the Clayton Act and each state’s applicable antitrust and consumer protection laws. The states sought a permanent injunction to prevent the merger, along with costs and attorney fees. The parties reached a settlement under which 330 stores in the 18 states would be divested to Sycamore partners and run as a new dollar store chain, Dollar Express. The agreement also required the defendants to report future acquisitions in any of the affected markets and to pay over $865,000 to reimburse the costs and fees of the plaintiff states.
Maryland et al. v. Perrigo Company, No. 1:04CV01398 (D.D.C. Aug. 17, 2004)
The FTC and states alleged that the companies had entered into a “pay-for-delay” arrangement, whereby Perrigo paid Alpharma to withdraw its generic version from the market for Children’t ibuprofen.According to the complaint, in June 1998, Perrigo and Alpharma signed an agreement allocating to Perrigo the sale of OTC children’s liquid ibuprofen for seven years. In exchange for agreeing not to compete, Alpharma received an up-front payment and a royalty on Perrigo’s sales of children’s liquid ibuprofen. The FTC received $6.25 million to compensate injured consumers. The states received $1.5 million in lieu of civil penalties. the parties were enjoined from future agreements.
U.S. and Plaintiff States v. US Airways Group et al., No. 1:13-CV-01236 (D.D.C. Aug. 13, 2013)
US DOJ and plaintiff states filed a complaint in federal court challenging the proposed merger between American Airlines and U.S. Airways. The complaint alleged the proposed merger would result in decreased competition, higher airfares and fees, reduced service and downgraded amenities. The dollar impact nationwide could exceed $100 million a year. The merger would make a combined U.S. Airways/American Airlines the largest worldwide carrier and reduce the number of the larger “legacy” airlines from four to three – U.S. Airways/American, United/Continental and Delta/Northwest – and the number of major airlines from five to four. If the merger were approved, the three remaining legacy airlines combined with Southwest Airlines would account for more than 80 percent of domestic travel. American Airlines is U.S. Airways’ chief competitor in the marketplace, meaning that the merger will likely only serve to increase fares and fees. Texas settled its case, entering into an agreement under which the merged airlines would maintain their operations at Texas airports, maintain DFW as a hub, and maintain its corporate headquarters in the Dallas area. DOJ and the remaining states reached settlements with the merging parties. The settlement requires US Airways and American to divest or transfer to low cost carrier purchasers approved by the department: 1) All 104 air carrier slots (i.e. slots not reserved for use only by smaller, commuter planes) at Reagan National and rights and interest in other facilities at the airport necessary to support the use of the slots; 2) Thirty-four slots at LaGuardia and rights and interest in other facilities at the airport necessary to support the use of the slots; and 3) Rights and interests to two airport gates and associated ground facilities at each of Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles International and Miami International. The settlement reached by the states requires maintenance of existing hubs in those states, consistent with their historical operations, for three years, and continued daily service for five years to each airport in the affected states that American and US Airways serviced at the time of filing.
In re DDAVP Antitrust Litigation
33 states investigated “pay for delay” allegations relating to DDAVP, a drug used to alleviate bed-wetting. States alleged that Aventis, holder of the patent for the medication, engaged in a scheme to delay the regulatory approval and sale of a generic version of DDAVP, in violation of state and federal antitrust law. States and defendants entered into a settlement under which states received $3.45 million, not as a civil penalty and defendants did not admit guilt.
State of Colorado et al v. Warner Chilcott, 1:05-cv-02182 (D.D.C.2005)
34 states filed suit alleging that Warner Chilcott entered into an illegal agreement with Barr Pharmaceuticals to raise the prices of Ovcon, an oral contraceptive. The lawsuit alleged that after Barr Pharmaceuticals publicly announced that it planned to have a generic version of Ovcon on the market by the end of the year, Warner Chilcott paid Barr Pharmaceuticals $1 million for an agreement designed to prevent Barr’s generic product from coming to market. Under the terms of the alleged agreement, once Barr received FDA approval to market generic Ovcon, Warner Chilcott had 90 days to pay Barr $19 million, after which Barr would refuse to bring the cheaper generic version to the market. The lawsuit alleged that as a result of the agreement, Warner Chilcott paid Barr a total of $20 million to keep it from marketing its generic version of Ovcon. In additon to a payment of $5.5 million, the settlement prohibits Warner Chilcott, for ten years, from entering into any agreement that would have the effect of limiting the research, development, manufacture, or sale of a generic alternative to one of its drugs. Furthermore, Warner Chilcott must provide the states notice of certain agreements it has entered into with generic manufacturers, and must continue to make its records available to the states for inspection to determine whether the company is complying with the terms of the agreement.
Maryland v. Rite-Aid Corp.
Rite Aid sought to acquire the assets of Canadian company Jean Coutu, which owned the Eckerd and Brooks retail pharmacy chains. Parties agreed to divest 26 stores in seven states.
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