Antitrust suits can proceed against GlaxoSmithKline

A federal judge has refused to dismiss a trio of antitrust lawsuits against pharmaceuticals giant GlaxoSmithKline that accuse the company of using a series of illegal tactics to delay the approval of generic versions of Flonase, a popular allergy drug.

According to the suits, sales of Flonase peaked at $1.3 billion in 2005 -- the last year of GSK's market exclusivity. But the plaintiffs allege that cheaper generic versions of the drug would have come on the market two years earlier but for GSK's delay tactics.

Lawyers for GSK -- the United Kingdom's largest drug maker, with a consumer health care unit in Moon -- argued that its conduct is immune from antitrust liability under the Noerr-Pennington doctrine, but U.S. District Judge Anita B. Brody found that the plaintiffs may be able to prove that the conduct was nothing but a "sham" that enjoys no such immunity.

The plaintiffs claim GSK improperly influenced the Food & Drug Administration's process for certifying that the generic versions satisfied its "bioequivalence" requirements, and that GSK petitioned the FDA to set extremely rigorous requirements using strict new tests that generic manufacturers would struggle to satisfy.

GSK also allegedly filed several citizen petitions with the FDA to oppose generic approvals, forcing the generic manufacturers to respond. The suit alleges that the petitions were frivolous and served only to delay generic approval, rather than to raise genuine concerns with the applications.

And when the FDA rejected all of the requests in GSK's petitions, the suits allege that GSK responded by filing a suit in federal court in Maryland where it secured a temporary injunction, but later failed to block the generic version from going to market.

Judge Brody is presiding over three suits -- two class actions brought by direct and indirect purchasers who complain that delaying the generic drugs forced them to pay higher prices, and a suit by Roxane Laboratories Inc., the generic manufacturer that was targeted by GSK in the Maryland suit.

GSK's lawyers -- Arthur Makadon, Leslie E. John, Stephen J. Kastenberg and Job M. Itzkowitz of Ballard Spahr -- moved for summary judgment in all three suits, arguing that the theory of the cases was fatally flawed because GSK's conduct is entitled to immunity under the Noerr-Pennington doctrine.

But plaintiffs lawyers argued that Noerr-Pennington immunity is not absolute and offers no protection for citizens' petitions and lawsuits that are deemed to be shams.

In her 31-page opinion, Judge Brody found that the U.S. Supreme Court set out a two-pronged test in Professional Real Estate Investors Inc. v. Columbia Pictures Industries Inc. to determine whether a party's conduct is a sham, and therefore not entitled to Noerr-Pennington immunity.

Under that test, Judge Brody said, the burden is on the plaintiffs to show that the petition or suit was "objectively baseless," meaning that no reasonable party could "realistically expect success on the merits."

The judge then analyzed each request GSK had made in its citizens' petitions to the FDA, and concluded that the plaintiffs may be able to prove that each and every one was a sham.

Judge Brody concluded that "[U.S. District Judge Andre M.] Davis' strong denial of a preliminary injunction, along with plaintiffs' evidence of the objective baselessness of the substantive requests made in GSK's citizen petitions, are sufficient to raise genuine issues of fact as to whether the Maryland lawsuit was objectively baseless."

GSK's lawyers did not respond to a request for comment on the ruling.

Shannon P. Duffy: sduffy@alm.com or 215-880-3700. To read more articles like this, visit www.thelegalintelligencer.com.

via post-gazette.com

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