NEW YORK (Legal Newsline) - The U.S. Court of Appeals for the Second Circuit has ruled that the defendants in a class action lawsuit involving Adderall XR did not violate the Sherman Act when it supplied the plaintiffs' competitors with an unbranded version of the drug.
The plaintiffs, who are wholesale dealers in pharmaceutical products including Adderall XR, brought the class action alleging that the defendants violated the anti‐monopolization provision of the Sherman Act by breaching defendantsʹ contracts to supply two of their competitors — who in turn supply the plaintiffs — with an unbranded version of the defendantsʹ patented drug for resale under the competitorsʹ own labels, according to the June 9 opinion.
Circuit judges Dennis G. Jacobs, Robert D. Sack and Raymond Lohier Jr. voted in the majority, with Sack authoring the opinion.
The plaintiffs claim the contracts themselves gave rise to a "duty to deal" under antitrust law.
"We disagree and therefore affirm the judgment of the United States District Court for the Southern District of New York... dismissing the complaint," the opinion says.
In May 2012, Louisiana Wholesale Drug Company filed the class action lawsuit against Shire. It was subsequently consolidated with a nearly identical action brought by Value Drug Company of Altoona, Pa.
The plaintiffs alleged that by supplying Teva and Impax with less than their requirements of unbranded Adderall XR, Shire relegated them to 50 to 60 percent of the market, instead of the 90 percent share they might have been expected to capture had they received the quantity of unbranded pills they had demanded.
This allegedly allowed Shire to fix, raise, maintain and/or stabilize the price of Adderall XR at supra-competitive levels and overcharge the plaintiffs and other direct purchasers by "hundreds of millions of dollars" in violation of the Sherman Act.
Shire moved to dismiss the complaint for failure to state a claim and the district court dismissed the complaint.
The Second Circuit agreed with the district court that the complaint failed to state a claim.
"Indeed, the complaint does little more than attach antitrust 'labels and conclusions' to what is, at most, an ordinary contract dispute to which the plaintiffs are not even parties," the opinion states. "In view of the plaintiffsʹ theory of the case and their disclaimer of reliance on the patent litigation that gave rise to Shireʹs agreements with Teva and Impax, we have not considered that litigation and those agreements in our analysis."
The plaintiffs failed to allege facts that would place this case within a narrow exception to the "long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal," the opinion says.
U.S. Court of Appeals for the Second Circuit case number: 13-1232
From Legal Newsline: Kyla Asbury can be reached at firstname.lastname@example.org.