Sun Pharmaceutical Industries Ltd.’s recent legal victory against allegations of delaying the release of a generic cholesterol-lowering drug has set a higher standard for plaintiffs seeking class certification in pay-for-delay cases. In June, U.S. District Judge Peter G. Sheridan of the District of New Jersey denied class certification to two groups of Lipitor purchasers, citing stringent requirements that plaintiffs must meet to gain class status in such antitrust cases. This ruling, detailed here, underscores the considerable evidentiary burden plaintiffs must clear when challenging patent litigation settlements involving brand drug companies and generic competitors.
According to Ken Racowski, a partner with Holland & Knight, the ruling is likely to be influential in future pay-for-delay litigation, such as the ongoing antitrust case concerning the Thalomid drug. Judge Sheridan found that the indirect buyers lacked a reliable method for identifying who qualified as class members, while the direct purchasers, like large wholesalers, failed to demonstrate they couldn’t sue independently of a class action. Sheridan also determined that the alleged anticompetitive settlement was not proven to cause any delay in the market entry of generic Lipitor.
This decision builds on Third Circuit precedents that have progressively raised the bar for class certification in pay-for-delay cases, such as the 2020 reversal of certification for epilepsy drug purchasers and the 2016 vacatur of class certification in a narcolepsy medication case. More details on these precedents can be found here and here.
Christine Bartholomew, an antitrust law professor at the University at Buffalo, highlighted that Sheridan’s opinion tightens the numerosity and ascertainability requirements, making it significantly harder for plaintiffs to aggregate claims. The Lipitor case raises questions about what constitutes sufficient evidence to meet these prerequisites. According to Ben Greenblum, a partner with Williams & Connolly LLP, this ruling emphasizes the necessity for plaintiffs to prove causation—linking the alleged anticompetitive acts to tangible harm—which remains a challenging hurdle even after establishing a factual dispute about the underlying conduct. Further insights from defense attorneys can be accessed here.
Given the prominence of the Lipitor case, Judge Sheridan’s decision will likely serve as a crucial reference in similar antitrust disputes. This is particularly pertinent when considering the complexities surrounding drug approval processes and the intricate chain of parties in prescription payment systems. The ongoing implications for future pay-for-delay litigation cannot be overstated. For detailed information on the Lipitor antitrust litigation, visit here.