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From Antitrust Law Daily, December 4, 2014

Product hopping claims against Reckitt Benckiser over opioid replacement drug proceed

By Linda O’Brien, J.D., LL.M.

Direct purchasers of the opioid replacement drug Suboxone alleged sufficient facts to pursue claims against brand drug manufacturer Reckitt Benckiser for engaging in a product hopping scheme to switch from a tablet form of the drug to a film form for the purpose of blocking generic competition, the federal district court in Philadelphia has decided. However, the purchasers’ claim that Reckitt manipulated Food and Drug Administration regulations to delay the entry of the generic version onto the market was dismissed (In re Suboxone (Buprehnorphine Hydrochloride and Naloxone) Antitrust Litigation, December 3, 2014, Goldberg, M.).

British pharmaceutical manufacturer Reckitt Benckiser produces and markets an opioid replacement therapy drug under the brand name Suboxone. The Food and Drug Administration (FDA) approved Reckitt’s new drug application (NDA) for Suboxone tablets in 2002. Reckitt obtained a seven-year period of exclusivity from the FDA, since Suboxone was found to be an orphan drug. Reckitt’s period of exclusivity was set to expire in October 2009. In 2008, Reckitt obtain a patent for Suboxone film and its NDA for Suboxone film was approved by the FDA in August 2010. Due to different dosage forms, a pharmacist could not provide generic Suboxone tablets when a patient had been a prescription for Suboxone film.

Direct purchasers and end payors of Suboxone filed a series of class action suits, alleging that Reckitt and its affiliates switched its marketing and manufacture from Suboxone tablets to Suboxone film for the purpose of blocking generic competition. Specifically, the direct purchaser plaintiffs asserted claims for unlawful maintenance of monopoly power by conversion of the market from tablet to film formulation, filing a sham Citizen Petition, and intentionally delaying the single shared risk evaluation and mitigation strategy program. Reckitt moved for dismissal the plaintiffs’ complaints.

Exclusionary conduct. The court determined the plaintiffs plausibly pleaded that the product hopping scheme constituted exclusionary conduct as required for an antitrust claims. Although deference is ordinarily given to innovation and new product creation, the unique nature of the pharmaceutical drug market warranted applying the rule of reason approach where the defendant’s procompetitive justifications were weighed against the anticompetitive results. According to the court, the plaintiffs’ sufficiently alleged that Reckitt’s disparagement of Suboxone tablets along with its threatened removal of the tablets from the market due to false safety concerns could plausibly coerce doctors and patients to switch from tablet to film. Moreover, Reckitt’s withdrawal of Suboxone tablets from the markets had to effect of reducing consumer choice.

Additionally, the complaint sufficiently pleaded an injury to competition. Generally, the introduction of new products does not create an antitrust injury. However, the plaintiffs’ allegations of Reckitt’s conduct considered as a whole—the fraudulent marketing campaign and withdrawal of Suboxone which resulted in purchasers paying inflated prices—could establish harm to competition.

Citizen Petition. The court found that the plaintiffs plausibly pleaded that Reckitt’s Citizen Petition, seeking to block FDA approval of pending applications by the generic companies on purported safety grounds, was a sham. While the FDA did not dismiss Reckitt’s petition outright as baseless, the FDA in its ruling referred Reckitt’s conduct to the FTC for investigation and noted that the timing of its withdrawal of Suboxone tablets from the market and the filing of the petition were in close alignment as to when generic competition for Suboxone was to begin.

SSRS process delay. In December 2011, the FDA required Reckitt to perform a Risk Evaluation and Mitigation Strategy (REMS) on the issue of risk of pediatric exposure to Suboxone tablets and directed Reckitt to collaborate with generic drug manufacturers on a Single Shared REMS (SSRS) program to add generic Suboxone products. The plaintiffs alleged that Reckitt used the SSRS process to delay generic competition by making unnecessary and unreasonable demands on the generic companies as a condition of its cooperation. Reckitt contended that the SSRS process, where the parties attempted to work together to establish a safe use of the drug, was simply a course of dealing and did not obligate Reckitt to interact with competitors on unfavorable terms. In dismissing this claim, the court agreed with Reckitt’s argument and determined that the antitrust laws did not impose a duty on Reckitt to aid the generic manufacturers in obtaining expeditious FDA approval of their generic versions.

The case is No. 13-MD-2445.

Attorneys: Lauren Guth Barnes (Hagens Berman Sobol Shapiro LLP), R. Jeffrey Behm (Sheehey Furlong Behm PC), and Stuart E. Desroches (Odom & Des Roches, LLP) for plaintiffs. Kimberly A. Brown (Jones Day) for Reckitt Benckiser Group PLC, Reckitt Benckiser Pharmaceuticals, Inc., Reckitt Benckiser Healthcare Ltd., Reckitt Benckiser LLC, and Reckitt Benckiser, Inc.

Companies: Reckitt Benckiser Group PLC; Reckitt Benckiser Pharmaceuticals, Inc.; Reckitt Benckiser Healthcare Ltd.; Reckitt Benckiser LLC; Reckitt Benckiser, Inc.

MainStory: TopStory Antitrust PennsylvaniaNews

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