Pharmaceutical Patent Antitrust Class Action Complaints Stated Plausible Claims for Relief, so the Third Circuit Reverses the Dismissal of Those Cases

In re Lipitor Antitrust Litig., 868 F.3d 231 (3d Cir. 2017).  It is evident that an appeal is a big one when, as here, the caption and counsel list consume the first seventeen pages of the Third Circuit’s opinion.  In this case, Chief Judge Smith wrote a 106-page opinion (including the caption and counsel list) that reversed the District Court’s dismissal of these consolidated pharmaceutical patent antitrust class action matters, which involved the drugs Lipitor and Effexor XR.

There were actually two sets of consolidated appeals, one set as to each of the drugs.  In both sets of appeals, plaintiffs alleged that the companies holding the patents for the pharmaceuticals at issue had entered into “reverse payment settlement agreements” with generic manufacturers, agreements that the Supreme Court of the United States had ruled in FTC v. Actavis, Inc., 133 S.Ct. 2223 (2013), were subject to antitrust scrutiny.  The panel found that plaintiffs had plausibly alleged such agreements in both sets of appeals.

But there was another issue in the Lipitor appeals.  That issue was whether plaintiffs “pled plausible allegations of fraudulent patent procurement and enforcement, as well as other related misconduct.”  Again, Judge Smith concluded that plaintiffs had done so.  The same District Court judge had dismissed the Lipitor cases and had dismissed certain allegations in the Effexor matters.  The Third Circuit’s decision today invoked the de novo standard of review, reversed those decisions, and remanded for further proceedings.

The procedural history of these cases is very involved, and the ultimate rulings are quite fact-intensive, dependent as they are on the pleadings offered by plaintiffs.  But the decision is an important one in this field.