FTC and Plaintiff States v. Mallilnckrodt Ard Inc. (formerly Questcor), No. 1:17-cv-00120 (D.D.C. Jan. 18, 2017)
Four states and the FTC reached a $100 million settlement with Mallinckrodt plc and its US subsidiary, formerly known as Questcor Pharmaceuticals, Inc. resolving a lawsuit accusing Questcor of monopolizing the market for Achthar, the only adrenocorticotropic hormone (ACTH) based therapeutic drug sold in the United States. ACTH is used as a last resort to treat infantile spasms and multiple sclerosis. Questcor allegedly blocked competition for Acthar by disrupting the bidding process and acquiring the U.S. rights for Synacthen Depot, the only other ACTH based drug sold in the world. In 2001, Questcor bought the rights to Acthar and increased the price of it by 85,000 percent, charging over $34,000 for a vial of the drug that used to cost $40 per vial. In 2012, Novartis Pharma A.G sold the U.S. rights of Synacthen, Achthar’s only competitor. The complaint alleges that three other companies had all conducted due diligence and submitted formal offers for Synacthen with plans to develop and launch Synacthen in the United States in direct competition with Questcor. However, perceiving the threat to its U.S. monopoly if a rival drug company purchased the assets, Questcor stepped in to outbid the three other companies, offering Novartis $135 million in guaranteed payments with only vague plans for Synacthen and after very limited due diligence. Through the acquisition, Questcor sought to extinguish the most likely challenges to its Acthar monopoly. According to the complaint, this allowed Questcor to continue charging over $34,000 per vial for H.P. Acthar Gel. In addition to paying $100 million in disgorgement, Under the settlement, Mallinckrodt will pay $100 million. The company will also be required to license a competitor to the rights it acquired from Novartis to commercialize and develop Synacthen in the United States, including the Synacthen trademark, along with clinical trial data and certain intellectual property related to manufacturing and formulation. Mallinckrodt is also prohibited from taking actions that would interfere with clinical trials or clinical plans for Synacthen.
State of California v. T.Rad Co. Ltd., No. 2:16-cv-13199 (E.D. Mich. Sept. 6, 2016)
California filed a complaint and settled with T.Rad Co, a maker of automobile radiators and automatic transmission fluid warmers, alleging that the company rigged bids and fixed the prices of its parts from at least 2002 to 2010. California received $162,500 in damages and attorneys fees and Florida received $81,250.T.RAD agreed to cooperate with the states by providing documents and information related to the investigations into the price fixing conspiracy.
State of Wisconsin et al. v. Indivior, No. 16-5073 (E.D. Pa. Sept. 22,2016)
Plaintiff states alleged that the makers of Suboxone, a drug used to treat opioid addiction, engaged in a scheme to block generic competitors and raise prices. Specifically, they are conspiring to wtich Suboxone from a tablet version to a flim in order to prevent or delay generic entry. The states allege that the manufacturers engaged in “product hopping” in which a company makes slight changes to its product to extend patent protections and prvent generic alternatives. The complaint was filed under seal.
West Virginia ex rel. Morrisey v. CRH, PLC, No. 17-C-41 (Cir. Ct. Kanawha Cty. Jan. 11, 2017)
CRH, PLC, through its subsidiary Oldcastle, is the largest producer of asphalt and the third-largest producer of aggregate in the U.S. the complaint alleges that through a series of acquisitions and anticompetitive actions, CRH has effectively exercised significant market power in West Virginia aggregate and asphalt markets. The conduct alleged includes inducing boycotts against competitors, threatening to put new competitors out of business; mandating statewide covenants not to compete for up to 10 years from competitors. The state alleged that CRH’s conduct has significantly increased prices for state road paving contracts in the three markets in the state between 2010 and 2014. the complaint included counts of violations of W.Va. Code 47-18-3 (restraint of trade); W.Va. Code 47-18-4 (monopolization and attempt to monopolize) and unjust enrichment. the complaint seeks injunctive relief, treble damages, disgorgement and restitution, divestiture; civil penalties and costs,
In the Matter of NFL Ticketing Investigation, Assurance No. 16-181(NY Attorney General Antitrust Bureau (Nov. 15, 2016)
Plaintiff states entered into a settlement agreement with the National Football League under which the NFL would discontinue its league-wide mandatory price floor (no tickets could be sold on the NFL secondary market platform for a price less than a season ticket holder’s price) and would not direct or require ticketing practices designed to preclude fans from using competing ticket exchanges.
California v. Panasonic Corporation, No. 2:16-cv-14117 (E.D. Mich. Nov. 21, 2016)
California sued Panasonic Corp. and its U.S. arm in Michigan federal court, alleging that the electronics company conspired to fix prices of switches and other car parts. The state alleged that from at least July 1998 to February 2010, the electronics company conspired with other companies to fix prices for various switches in vehicles, high-intensity-discharge lamp ballasts and steering angle censors, resulting in increased costs for state agencies purchasing cars and parts, along with increased costs for the state�s consumers. The complaint charged the companies with violations of both federal and California antitrust laws, unfair competition and unjust enrichment, and alleged that the deadweight losses to the economy of the state, including reduced output, higher prices and reduction in consumer welfare. The complaint was filed to effectuate a settlement between California and Florida and Panasonic that had been reached in 2015. California received $350,000 and Florida received $187,500 and Panasonic provided the states with all documents and information from the investigations by USDOJ, the EU and Japan and documents provided to class counsel in the multidistrict litigation.
Connecticut et al. v. Teva Pharmaceuticals et al. Civ. Action No. (D.Conn. Dec. 15, 2016)
Twenty states filed a federal lawsuit against six generic drug manufacturers, alleging that they entered into long-running and well coordinated illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition in the United States for two drugs: doxycycline hyclate delayed release, an antibiotic, and glyburide, an oral diabetes medication. The lawsuit was filed under seal to avoid compromising a continuing investigation. In the complaint, the states allege that the misconduct was conceived and carried out by senior drug company executives and their marketing and sales executives. The complaint further alleges that the defendants routinely coordinated their schemes through direct interaction with their competitors at industry trade shows, customer conferences and other events, as well as through direct email, phone and text message communications. The states further allege that the drug companies knew that their conduct was illegal and made efforts to avoid communicating with each other in writing or, in some instances, to delete written communications after becoming aware of the investigation. The states allege the anticompetitive conduct, including price-fixing and price maintenance, market allocation and other anticompetitive acts, caused significant, harmful and continuing effects in the country’s healthcare system. The states sought an injunction to prevent the companies from engaging in illegal, anticompetitive behavior and also sought equitable relief, including disgorgement. An additional 20 states joined the complaint in March 2017.
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.