On December 5, 2014, an 11-person jury decided in favor of defendants AstraZeneca PLC and Ranbaxy Laboratories, Inc. in the first pay-for-delay class action trial since the United States Supreme Court in FTC v. Actavis, Inc. opened the door on antitrust suits based on patent settlements. Teva Pharmaceutical Industries, Ltd. was also defending the suit before reaching a settlement shortly before the trial ended. United States District Court Judge William Young of the District of Massachusetts last year permitted certification for the class members, including union health plans and insurance companies, based on an alleged injury of supracompetitive prices for AstraZeneca’s brand name heartburn drug, Nexium®.
During the six week jury trial, the main focus of the arguments centered on the resolution of a lawsuit brought by AstraZeneca against Ranbaxy under the Hatch-Waxman Act regarding Ranbaxy’s Abbreviated New Drug Application (“ANDA”) filed with the Food and Drug Administration (FDA) seeking approval to market a generic version of Nexium®. Ranbaxy was the first generic-drug maker to file an ANDA, but AstraZeneca also brought suits against Teva and Dr. Reddy’s Laboratories, Inc. following receipt of their Paragraph IV certifications stating that they too had filed ANDAs with the FDA seeking approval to launch generic versions of Nexium®. The suits settled with an agreement that AstraZeneca would permit Ranbaxy early market entry on May 2014 – years before the last of the patents covering Nexium® will expire – and the benefit of some exclusivity period. AstraZeneca also settled with Teva and Dr. Reddy’s with license entry onto the market until May 2014, subject to Ranbaxy’s expected 180 day exclusivity period, in return for Teva and Dr. Reddy’s admission that the patents were valid and infringed by their ANDA products. AstraZeneca also forgave the liabilities created by Teva’s at-risk launch of its related generic Prilosec product.