Shire Wins Dismissal of Adderall XR Monopolization Case

Shire Wins Dismissal of Adderall XR Monopolization Case

A court in the Southern District of New York recently dismissed a monopolization claim brought by Louisiana Wholesale Drug Co. alleging that Shire violated Sherman Act §2 when it allegedly breached license and supply agreements with two generic firms related to its drug, Adderall XR.  The license and supply agreements were the result of the parties settling patent litigation filed by Shire after the generic firms—Teva and Impax—filed Abbreviated New Drug Applications (“ANDAs”) to market generic versions of Adderall XR.  Under the terms of the settlement, Teva and Impax agreed not to launch their own products for three years, after which time Shire agreed to license Teva and Impax to sell generic Adderall XR.  Shire also agreed to supply them with the drug under requirements contracts.  Louisiana Wholesale alleged that Shire intentionally breached these requirements contracts in order to “to keep supplies artificially low and prices artificially high.” In holding that there was no basis for a §2 claim the court relied upon the reasoning articulated by the Second Circuit in In re Tamoxifen Citrate Litig.  In that case, the court explained that agreements between a patent holder and a potential competitor delaying or otherwise restricting entry are generally not unlawful unless they improperly extend the scope of the patent because—unless a patent is shown to be invalid or not infringed by the generic product—the patent holder has the right to completely exclude competitors for the life of the patent.  Accordingly, there was no basis for a monopolization claim because plaintiffs failed to plead that Shire’s conduct affected competition outside the scope of a valid patent.  Indeed, the court noted that under Tamoxifen, Shire could simply have paid the generic companies to settle without supplying them with any product at all, and that would have been lawful absent evidence that its patent case was meritless.  The court also rejected an argument based on Aspen Skiing that Shire had a duty to deal with the generic firms because the license agreements constituted a prior course of dealing between the parties.  The court concluded, however, that the alleged “undersupplying” did not state an antitrust violation under Aspen Skiing either because it failed to allege harm to competition outside the scope of a valid patent. Although not a pay-for-delay case, at least in the traditional sense, it is important to note that the court relied heavily upon Tamoxifen, which relies on an analysis that is under review in the upcoming Supreme Court ruling in FTC v. Actavis.

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