Introduction
The case of Picone v. Shire U.S. Inc., filed as 1:16-cv-12396 in the U.S. District Court for the District of Massachusetts, is a significant antitrust litigation involving allegations of anticompetitive practices by pharmaceutical companies Shire and Actavis. This article delves into the key aspects of the case, including the factual allegations, legal arguments, procedural history, and the implications of the litigation.
Nature of the Action
This is a putative class action lawsuit brought by Tina Picone on behalf of herself and all others similarly situated, who are indirect purchasers of Intuniv, a branded once-daily, extended-release formulation of guanfacine hydrochloride used to treat Attention Deficit Hyperactivity Disorder (ADHD)[1][4].
Parties Involved
- Plaintiff: Tina Picone, a resident of Dutchess County, New York, acting on behalf of herself and other indirect purchasers of Intuniv.
- Defendants: Shire U.S., Inc., Shire LLC, Actavis Elizabeth LLC, Actavis Inc., and other related entities.
Factual Allegations
The plaintiffs allege that Shire extended its original patent protection for Intuniv through several anticompetitive strategies:
- Asserting Dubious Patents: Shire extended its patent protection by asserting patents of dubious validity and prosecuting weak patent litigation against generic rivals[1].
- Reverse Payment Settlements: Shire entered into reverse payment settlement agreements with Actavis, which delayed the entry of generic competition for Intuniv by approximately two years. This delay resulted in consumers paying inflated prices for the brand medication[1][4].
Legal Claims
The plaintiffs assert several legal claims:
- Violation of Federal Antitrust Statutes: The defendants allegedly engaged in an illegal restraint of trade, illegal monopoly, and unlawful attempted monopolization in violation of Sections 1 and 2 of the Sherman Act[4].
- State Consumer Protection and Antitrust Law: The defendants' conduct is also alleged to violate state consumer protection acts and antitrust laws in Massachusetts and New York[1].
Procedural History
- Filing and Class Certification: The lawsuit was filed on November 23, 2016. The court denied the indirect purchaser plaintiffs' (IPPs) motion to certify two classes of indirect purchasers on August 21, 2019. The IPPs have since filed a petition with the First Circuit to appeal this decision[4].
- Settlements and Interventions: On August 19, 2020, Actavis informed the court that it had reached a settlement agreement with the direct purchaser plaintiffs (DPPs), but this settlement did not resolve the claims against Shire or the IPPs' claims against Actavis. Additionally, Meijer, Inc. and Meijer Distribution, Inc. were granted permission to intervene in the case[4].
Expert Testimony and Evidentiary Motions
The court has addressed several evidentiary motions related to expert testimony. For instance, the plaintiffs have moved to strike certain opinions by an economist, arguing that he ignored direct evidence of market power and cherry-picked indirect evidence without examining cross-price elasticity[4].
Market Power and Relevant Market
The relevant market for Intuniv includes other non-stimulant drugs used to treat ADHD. The economist's report indicated that Intuniv's share of this market was no more than 27.5% at the time of the alleged anticompetitive agreement. However, the plaintiffs argue that this analysis failed to consider direct evidence of market power, such as profit margins and price elasticity[4].
Implications and Settlements
The litigation highlights the significant financial impact of anticompetitive practices on consumers. The delay in generic competition resulted in consumers paying hundreds of millions of dollars more for Intuniv than they would have if generic alternatives had been available sooner. In 2021, Shire agreed to pay an additional $1.9 million, boosting the total settlement to $3 million, although this settlement does not resolve all claims[5].
Key Takeaways
- Anticompetitive Practices: The case underscores the importance of monitoring and regulating anticompetitive agreements between brand and generic pharmaceutical manufacturers.
- Consumer Impact: The delay in generic competition can result in substantial financial burdens on consumers.
- Legal Challenges: The litigation process is complex, involving multiple motions, appeals, and interventions.
- Settlements: While settlements can provide some relief, they may not always resolve all claims or fully compensate affected parties.
Frequently Asked Questions (FAQs)
Q: What is the main allegation in the Picone v. Shire U.S. Inc. case?
A: The main allegation is that Shire and Actavis engaged in anticompetitive practices by delaying the entry of generic competition for Intuniv, thereby inflating prices for consumers.
Q: What is the role of reverse payment settlements in this case?
A: Reverse payment settlements between Shire and Actavis delayed the entry of generic Intuniv, extending the brand's market exclusivity and resulting in higher prices for consumers.
Q: Which laws are alleged to have been violated?
A: The defendants are alleged to have violated Sections 1 and 2 of the Sherman Act, as well as state consumer protection and antitrust laws in Massachusetts and New York.
Q: What is the current status of the class certification?
A: The court denied the IPPs' motion to certify two classes of indirect purchasers, and the IPPs have appealed this decision to the First Circuit.
Q: How much did Shire agree to pay in the recent settlement?
A: Shire agreed to pay an additional $1.9 million, bringing the total settlement to $3 million, although this does not resolve all claims against the defendants.
Cited Sources:
- Picone v. Shire U.S. Inc. et al - Class Action Complaint[1].
- In re Intuniv Antitrust Litig. - Casetext[2].
- Picone v. Shire U.S. Inc. et al (Indirect Purchaser Antitrust Class Action) - Law360[3].
- In re Intuniv Antitrust Litig., Civil Action No. 1:16-cv-12653-ADB - Casetext[4].
- Shire Pays $1.9M, Boosting ADHD Med Antitrust Deal To $3M - Law360[5].
