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ACTOS End-Payor Antitrust Litigation

Plaintiffs allege that the defendants-appellees (collectively “Takeda”) prevented competitors from timely marketing a generic version of Takeda’s diabetes drug ACTOS by falsely describing two patents to the Food and Drug Administration. Plaintiffs claim that these false patent descriptions channeled Takeda’s competitors into a generic drug approval process that granted the first-filing applicants a 180-day exclusivity period, which in turn acted as a 180- day “bottleneck” to all later-filing applicants. Of the ten generic applicants, nine took that route. However, one generic manufacturer, Teva Pharmaceutical Industries, Ltd. and Teva Pharmaceuticals USA, Inc. (collectively “Teva”), sought approval via another regulatory mechanism, but was thwarted when the FDA announced that all generic manufacturers would be required to take the bottlenecked route. The FDA’s announcement was expressly based on Takeda’s representations that it had correctly described its patents. Thereafter, Takeda settled pending patent infringement suits with the three first-filing generic manufacturers and Teva on terms that kept them out of the market until August 2012 (though Teva, unlike the three firstfiling generics, could only enter the market as an authorized distributor at that time), and with the other six later-filing generic manufacturers on terms that kept them out of the market for another 180 days after that, i.e., until at least February 2013.

Plaintiffs and the class they seek to represent are drug purchasers who allege that they were wrongfully obliged to pay monopoly prices for ACTOS from January 2011, when Takeda’s patent on the active ingredient in ACTOS expired, to at least February 2013, when the mass of generic market entry occurred.

The district court dismissed plaintiffs’ antitrust claims for failing to plausibly allege that Takeda’s false patent descriptions caused any delay in generic market entry. The district court reasoned that, inter alia, plaintiffs failed to identify a viable regulatory route for generic drug approval that would have avoided the 180-day bottleneck, and that even if they had, they failed to plausibly allege how the generic manufacturers would have avoided Takeda’s infringement lawsuits, all of which were voluntarily settled. Plaintiffs appealed.

To the extent plaintiffs’ theory posits a delay in the marketing of generic alternatives to ACTOS by all the generic applicants other than Teva, we affirm, because plaintiffs’ theory presupposes that these applicants were aware of Takeda’s allegedly false patent descriptions when they filed their applications, which is not supported by well-pleaded allegations. However, because plaintiffs’ theory as to Teva does not require any knowledge of the false patent descriptions, we reach other issues as to Teva and find that plaintiffs plausibly alleged that Takeda delayed Teva’s market entry. We therefore vacate the judgment of the district court to that limited extent.

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