Litigation Details for In re Novartis and Par Antitrust Litigation (S.D.N.Y. 2018)

In re Novartis and Par Antitrust Litigation (S.D.N.Y. 2018)

Docket		Date Filed	2018-05-16
Court	District Court, S.D. New York	Date Terminated	2023-07-25
Cause	15:1 Antitrust Litigation (Monopolizing Trade)	Assigned To	Alvin K. Hellerstein
Jury Demand	Plaintiff	Referred To	Stewart D. Aaron
Patents	6,294,197; 6,395,728
Link to Docket	External link to docket

Details for In re Novartis and Par Antitrust Litigation (S.D.N.Y. 2018)

Date Filed	Document No.	Description	Snippet	Link To Document
2018-05-16				External link to document
2018-05-16	1	Complaint	follow-on patents, U.S. Patent Nos. 6,294,197 (“the ‘197 Patent”) and 6,395,728 (the ‘728 Patent), which…for Exforge: the ‘578 Patent; the ‘197 Patent; and the ‘728 Patent. The ‘578 Patent, which disclosed and…the ‘578 Patent expired on September 21, 2012. Neither the ‘197 Patent nor the ‘728 Patent 10 As … the ’728 Patent, and is therefore prior art to the ‘728 Patent. The ‘904 Prior Art Patent is titled…exclusivities associated with U.S. Patent No. 5,399,578 (“the ‘578 Patent”), which covered the active ingredient	External link to document
2018-05-16	139	Amended Complaint	5,399,578 (the ‘578 Patent); U.S. Patent No. 6,294,197 (the ‘197 Patent); and U.S. Patent No. 6,395,728 (the… Exforge: the ‘578 Patent, the ‘197 Patent, and the ‘728 Patent. The ‘578 Patent, which disclosed and… the ’728 Patent, and is therefore prior art to the ‘728 Patent. The ‘904 Prior Art Patent is titled …below) to three patents that Novartis had listed in the FDA’s “Orange Book”: U.S. Patent No. 5,399,578 …the ‘728 Patent). Par and Synthon filed paragraph III certifications to the ‘578 Patent, agreeing that	External link to document
2018-05-16	193	Memorandum & Opinion	certain follow-on patents (U.S. Patent Nos. 6,294,197 ("the '197 Patent") and 6,395,728…Novartis' patents. Novartis owned U.S. Patent No. 5,399,578 ("the '578 patent), which covered…, 4, 77. The validity of this patent was not challenged. The patent expired on March 21, 20_12, and… to the patent holder, among others, and describe the basis for its position that the patent at issue…, "Novartis"), nearing the end of one patent covering their prescription drug, Exforge, a blood	External link to document
2018-05-16	412	Memorandum of Law in Support of Motion	likely invalidation of their pivotal . . . 6,395,728 patent[].” Id. at -059. On April 30, 2007, Novartis…likely invalidation of their pivotal . . . 6,395,728 patent[].” Ex. 25, NPC_01520380, at -380 (evaluating…Exforge—the ’197 Patent, the ’728 Patent, and U.S. Patent No. 5,399,578 (“the ’578 Patent”). Ex. 11,5 NPC… likely to win the patent litigation. A patent win would preserve the entire patent term (until July … not refer to the ’197 Patent by its patent number, but it identified a patent with an expiration date	External link to document

In re Novartis and Par Antitrust Litigation: A Comprehensive Summary and Analysis

Introduction

The In re Novartis and Par Antitrust Litigation (Case No. 1:18-cv-04361) is a significant antitrust case that involves allegations of price-fixing and anticompetitive practices by pharmaceutical giants Novartis and Par Pharmaceutical. This litigation revolves around the blood pressure medication Exforge, a combination of amlodipine and valsartan.

Background of the Case

The lawsuit was filed in 2018 in the U.S. District Court for the Southern District of New York, accusing Novartis and Par Pharmaceutical of violating federal antitrust laws, state antitrust laws, and consumer protection laws. The core allegation is that the companies entered into a "pay-for-delay" agreement, a type of reverse payment settlement, which delayed the entry of generic versions of Exforge into the market[2][4][5].

The Pay-for-Delay Agreement

At the heart of the litigation is a 2011 licensing agreement between Novartis and Par Pharmaceutical. Under this agreement, Par delayed the launch of its generic version of Exforge until September 30, 2014, despite having FDA approval as early as September 2012. In return, Novartis agreed not to launch an authorized generic version of Exforge for six months after Par's generic version hit the market, effectively giving Par exclusive rights to market its generic from September 30, 2014, to March 30, 2015[2][5].

Allegations and Charges

The plaintiffs, comprising direct purchasers, end payors, and retailers, alleged that this agreement was anticompetitive and violated the Hatch-Waxman Act. They argued that the delay in the generic launch allowed both companies to maintain higher prices for Exforge and its generic equivalent, harming consumers and restraining competition[2][4][5].

Legal Proceedings and Expert Testimonies

The litigation involved extensive expert testimonies and complex legal arguments. Novartis and Par retained experts such as James Hughes and Laurence Baker to rebut the plaintiffs' claims. These experts argued that the settlement did not include large and unexplained payments, and that the alternative settlement models proposed by the plaintiffs were flawed. They also contended that the relevant market defined by the plaintiffs was too narrow and that Novartis did not have significant market power[4].

Settlement and Resolution

After nearly five years of litigation, Novartis agreed to a $30 million settlement to resolve the antitrust claims. This settlement was approved by the U.S. District Court for the Southern District of New York in October 2023. The settlement benefits individuals and entities that purchased or paid for brand and generic Exforge between September 21, 2012, and June 30, 2018, in specified states and the District of Columbia[1][5].

Impact and Implications

The settlement marks a significant victory for the plaintiffs, especially given that Par's parent company had filed for bankruptcy, potentially limiting the recovery from Par. This case highlights the complexity and challenges of prosecuting antitrust cases in the pharmaceutical industry, particularly those involving pay-for-delay agreements. It also underscores the importance of antitrust laws in ensuring competition and protecting consumers from artificially inflated prices[2][5].

Key Players and Roles

• Novartis: The Swiss multinational pharmaceutical corporation that manufactured Exforge.
• Par Pharmaceutical: The generic pharmaceutical company that agreed to delay the launch of its generic version of Exforge.
• DiCello Levitt: The law firm that served as Lead Counsel for the plaintiffs, securing the $30 million settlement.
• Expert Witnesses: James Hughes and Laurence Baker, who testified on behalf of Novartis and Par to rebut the plaintiffs' claims.

Broader Context and Industry Implications

This case is part of a larger trend of antitrust litigation in the pharmaceutical industry, where pay-for-delay agreements have been repeatedly challenged. The Federal Trade Commission has been vigilant in monitoring such agreements, and the courts have increasingly ruled against them as anticompetitive. This litigation reinforces the regulatory scrutiny on pharmaceutical companies to ensure that their practices do not harm competition and consumer welfare[2].

Conclusion

The In re Novartis and Par Antitrust Litigation is a landmark case that underscores the importance of antitrust laws in the pharmaceutical industry. The $30 million settlement is a significant outcome that highlights the consequences of engaging in anticompetitive practices. This case serves as a reminder to pharmaceutical companies to adhere to competitive practices and avoid agreements that could be seen as restraining competition.

Key Takeaways

• Pay-for-Delay Agreements: These agreements can be anticompetitive and violate antitrust laws.
• Regulatory Scrutiny: The pharmaceutical industry is under increasing scrutiny for anticompetitive practices.
• Consumer Impact: Delaying generic drug launches can lead to higher prices and harm consumers.
• Legal Complexity: Antitrust cases in the pharmaceutical industry are complex and often involve extensive expert testimonies.
• Settlement Outcomes: Significant settlements can result from antitrust litigation, benefiting affected consumers and entities.

FAQs

Q: What was the central allegation in the Novartis and Par Antitrust Litigation? A: The central allegation was that Novartis and Par Pharmaceutical entered into a "pay-for-delay" agreement, delaying the entry of generic versions of Exforge into the market.

Q: What were the terms of the pay-for-delay agreement? A: Par delayed launching its generic version of Exforge until September 30, 2014, and Novartis agreed not to launch an authorized generic version for six months after Par's generic version hit the market.

Q: Who were the plaintiffs in this litigation? A: The plaintiffs included direct purchasers, end payors, and retailers who purchased or paid for brand and generic Exforge.

Q: What was the outcome of the litigation? A: Novartis agreed to a $30 million settlement to resolve the antitrust claims.

Q: Why is this case significant in the pharmaceutical industry? A: This case highlights the regulatory scrutiny on pay-for-delay agreements and the importance of adhering to competitive practices to avoid antitrust violations.

Sources

1. Top Class Actions - Novartis and Par Exforge price-fixing $30M class action settlement
2. Pharmaceutical Technology - Exforge antitrust settlement caps Novartis' year of legal disputes
3. Casetext - In re Novartis & Par Antitrust Litig.
4. Cornerstone Research - In re Novartis and Par Antitrust Litigation
5. DiCello Levitt - Novartis and Par Antitrust Litigation