The Fourth Circuit on Tuesday vacated a district court judgment that dismissed a class-action complaint lodging claims of federal and state antitrust law violations against Actelion Pharmaceuticals Ltd., Actelion Pharmaceuticals US Inc., and Janssen Research & Development LLC, remanding the matter back to the District of Maryland for further proceedings.
The class action originated over allegations that Actelion “extended its patent monopoly” for pulmonary artery hypertension drug Tracleer beyond the patent expiration date, the court explained, “through illegitimate means” in order to corner the market of generic pharmaceuticals and inflate Tracleer prices. The plaintiff class, led by the Mayor and City Council of Baltimore and Government Employees Health Association, alleged that they had to pay “supracompetitive prices” for the drug for at least three years after the Tracleer patent expired because no generic competitors were able to enter the market with a new product in that time period, the court explained.
“Actelion was thus able to continue to charge the same supracompetitive prices for Tracleer that it had charged before the patent expired,” the court said, recounting the plaintiffs’ allegations. “In their complaint, the plaintiffs alleged that this absence of competition was attributable to a multi-year scheme by Actelion to block at least four generic manufacturers from filing applications for approval of a generic version of Tracleer.”
The District of Maryland reasoned that most of the plaintiffs’ claims were barred by a four-year statute of limitations “because the action was commenced on November 19, 2018, more than four years after ‘Actelion’s last overt anticompetitive act’ in February 2014,” the court explained. The other claims not barred by statutes of limitations, according to the district court, lacked standing and thus did not survive.
The circuit court decided to vacate and remand the lawsuit, reasoning that the plaintiffs’ antitrust allegations “did not accrue until the plaintiffs were injured by paying supracompetitive prices for Tracleer after the patent expired in November 2015,” making the original November 2018 filing timely. Regardless, the court noted that “new limitations periods began to run from each sale (of Tracleer) that caused the plaintiffs damages,” which the circuit court said necessarily began in November 2015 at the expiration of Actelion’s patent, so the court said the claims were within the statute of limitations.
The Fourth Circuit said it “largely agree(s)” with the district’s judgment that certain claims — which were brought by Maine, Minnesota, Vermont and Wisconsin — lacked standing because plaintiffs cannot “seek relief under the laws of States in which they made no purchases of Tracleer”; however, the court left this particular judgment contingent on whether the class of plaintiffs gains certification under the Federal Rules of Civil Procedure, saying that the states in question may have more success advancing their claims on behalf of other class members in the appropriate states.
“In vacating the district court’s order of dismissal, we do not suggest any outcome on the plaintiffs’ claims,” the court concluded. “Their complaint contains only allegations that have yet to be proven or tested.”
In a statement provided to Law Street, Natalia Salomao, Communication & Public Affairs Leader at Janssen Pulmonary Hypertension said “At Janssen, we cooperate with generic manufacturers so they have access to our medicines at reasonable, market-based prices. We will remain focused on advancing the science around our treatments for PAH and our long-standing commitment to the PAH community. We remain confident we acted appropriately and intend to defend our position in court.”
The plaintiffs are represented by Hagens Berman Sobol Shapiro LLP, the Baltimore City Law Department, Cohen Milstein Sellers & Toll PLLC, Radice Law Firm P.C., and the Law Office of E. David Hoskins. The defendants are represented by Cravath, Swaine & Moore LLP and Conti, Fenn & Lawrence LLC.