In July 2020, a Philadelphia judge ruled that Teva Pharmaceutical Industries Ltd. will be the first trial to advance in the multi-district litigation (MDL) regarding an alleged industry-wide conspiracy to fix generic prices. Meanwhile, trials involving schemes to fix the prices of three specific drugs (clobetasol, clomipramine, and pravastatin) will advance along a separate track. The MDL, which accuses top generic drug makers of working together to increase drug prices, has been consolidated in the United States District Court for the Eastern District of Pennsylvania.
What began as a lawsuit centered around digoxin (heart rhythm drug) and doxycycline (antibiotic) has grown in encompass a wide range of lawsuits covering more than 200 generic drugs. The lawsuits also include allegations of industry-wide conspiracies pushed by companies such as Teva and Heritage Pharmaceuticals, Inc. Currently, the MDL also involves antitrust suits filed by healthcare companies, enforcement actions filed by almost all state attorneys general, and proposed class actions on behalf of direct purchasers, indirect resellers, and end-payers. In addition to the MDL, there is a federal price-fixing probe.
There are essentially two case types: Heritage-centric cases and Teva-centric cases. Defendants in the litigation attempted to argue that all of the Heritage-centric cases -those brought by both the Private Plaintiffs and the State Plaintiffs – should move forward together with a decision on class certification, followed by motions for summary judgment, and then a trial on any remaining claims. Defendants believe that the State Plaintiffs’ Teva-centric case is “too massive and too complicated.” Additionally, they argue that allowing Heritage-centric cases to move forward first, both State and Private Plaintiffs’ cases could be tried together, and would provide better guidance to the parties as to the relative strengths of claims and defenses. Judge Rufe did not believe that the defendants’ proposal was unreasonable, but was not persuaded that it is a preferable way forward, or even that it would advance the litigation as effectively.
Moving forward, Plaintiffs will need to prove that they can meet the standards for class certification under Rule 23 with respect to individual drug conspiracies, and will also “explore the merits of an overarching conspiracy case that involves many different Defendants and numerous drugs.” Judge Rufe believes that such an approach considers multiple important factors, such as the types of cases in the MDL and the inclusion of different Plaintiff groups and many of the Defendants.
The Way Forward
Moving forward, Plaintiffs will need to prove that they can meet the standards for class certification under Rule 23 with respect to individual drug conspiracies, and will also “explore the merits of an overarching conspiracy case that involves many different Defendants and numerous drugs.” Judge Rufe believes that such an approach considers multiple important factors, such as the types of cases in the MDL and the inclusion of different Plaintiff groups and many of the Defendants.
Going forward, the Court will approve a process that allows for determination of class certification, for filing of summary judgment, and for a clear path forward to test the allegations of both single and overarching conspiracies.
Judge Cynthia Rufe believes that this way of handling the cases will not only test the case’s fitness for class action treatment “as to several individual drug conspiracies,” but will also “explore the merits of an overarching conspiracy case.” This approach, according to Judge Rufe, “is largely the approach favored by Plaintiffs, and numerous Defendants have filed objections to this proposal in favor of their proposal to move forward with the Heritage-centric cases instead.”