In re Wellbutrin XL Antitrust Litigation, 2012 U.S. Dist. LEXIS 66312 (E.D. Pa.

2012) In In Re Wellbutrin XL Antitrust Litigation, Plaintiffs, indirect purchasers of prescription drugs, brought an action in the Easter District of Pennsylvania alleging Sherman Act violations against Defendants, Biovail and GlaxoSmithKline PLC (GKS). Defendants are producers of Wellbutrin XL, a once-a-day antidepressant. Plaintiffs claimed that Defendants illegally conspired to prevent generic versions of Wellbutrin XL from entering the American market by filing sham patent infringement lawsuits and a Citizen Petition with the Food and Drug Administration (FDA). After a new drug has been approved, manufacturers of generic equivalents may submit abbreviated documentation to the FDA that relies on the information contained in the original application. However, as part of this approval process a manufacturer must submit one of four certifications regarding the patent behind the brand-name drug. A paragraph IV certification represents that a patent is invalid or will not be infringed by a generic drug. If a patent holder files an infringement suit against a generic manufacturer within 45 days after receiving notice, the patent holder benefits from a statutory stay on FDA approval of the generic drug for a period of 30 months, or until the resolution of the infringement suit, whichever is sooner. Additionally, under Federal regulations, an interested person may file a Citizen Petition with the FDA requesting that the FDA take further action to ensure that a generic is safe before it is brought to market. Plaintiffs alleged that Defendants formed a conspiracy in violation of the Sherman Act to employ patent infringement lawsuits and a Citizen Petition to prevent the generic drugs from reaching the market. Defendants asserted that their conduct was immune from liability under the Noerr-Pennington doctrine. The court granted summary judgment in favor of Defendants Noerr-Pennington claims. The Noerr-Pennington doctrine shields from liability activities designed to influence government policy or legislation. Where that activity is a mere sham to cover what is actually no more than an attempt to unjustly interfere with the business relationship of a competitor, the conduct is not immune from liability. Conduct will be determined to be a sham if it was (1) objectively baseless, and (2) subjectively a concealed attempt to stifle competition. First, the court considered whether the objectively baseless prong must be proved by clear and convincing evidence or merely a preponderance. Although the court cited cases employing the clear and convincing standard, it did not decide the question, finding instead that Defendants would prevail under either standard. Next, the court evaluated Biovails claims in each patent infringement lawsuit, and concluded that the claims did not fall within the sham exception to Noerr-Pennington immunity. Between September 2004 and May 2005, four different generic companies (Anchen, Abrika, Impax, and Watson), sought approval from the FDA for a generic version of Wellbutrin XL. First, the court analyzed Biovails claims against Anchen and Watson, since the lawsuits were based on the same operative language in the paragraph IV certifications. Anchen and

Watson certified that their products did not infringe the Wellbutrin patent because their products contain a stabilizing amount of hydrochloric acid, compared to the Wellbutrin patent which declares that the product is free of stabilizer. The court found instructive but not determinative that Biovail lost these infringement suits. The court held that it was not objectively baseless for Biovail to argue that stabilizer in the generic patents should be construed as a functional term. Second, in regards to Biovails infringement suit against Abrika, the court found it unnecessary to decide whether the lawsuit was objectively baseless. Plaintiffs sham litigation allegations required a showing that the infringement lawsuit caused an injury. However, it was undisputed that absent Biovails conduct, Abrika could not have begun marketing its drug any earlier due to the fact that as the first approved generic drug, Anchen benefited from a statutory 180 day marketing exclusivity period. Although Biovails patent infringement suit against Anchen delayed the tolling of the exclusivity period, the court held that the Anchen suit was not objectively baseless, so any corresponding delay in Abrikas approval could not be considered an injury under the sham exception. Third, the court concluded that the infringement suit against Impax was not objectively baseless. In this suit regarding dueling constructions of the term delayed release tablet, the court found it significant that the trial judge regarded the case as a close question and noted that both parties' positions were ably presented in their briefs and at oral argument. The court concluded that this litigation history did not fit the profile of objectively baseless litigation. The court also considered whether the Citizen Petition fell under the sham exception. First, the court found that certain of the requests in the Citizen Petition approved by the FDA was not objectively baseless since a successful effort to influence government action by definition cannot be a sham. The court also rejected the argument that the petition should not be immune since the FDA was already considering a similar policy. The court was not prepared to curtail the right to influence government policy by stripping antitrust immunity for issues already on the radar of federal regulators. Second, the court addressed Defendants claim that even if some of the requests were sham, the entire petition is immunized by the presence of successful, non-sham, requests. The court suggests that it would be bad policy to allow a party to initiate sham litigation but then gain immunity for the action by tacking on a single meritorious claim. Ultimately, the court declined to resolve this issue because Plaintiffs did not demonstrate that the rejected claims caused delay beyond the delay that would have occurred if only the non-sham claims were presented. Next, the court addressed Biovails claim that the party to file a Citizen Petition should be immune from antitrust liability because the FDA is directly responsible for the injury. The court indicated that it would be bad policy to immunize a party behind a Citizen Petition, no matter how frivolous the claims presented. Furthermore, since Congress has not explicitly repealed the antitrust laws in the context of Citizen Petitions, Biovails claim would require a showing of plain repugnance between the two legal regimes. Again, the court found it unnecessary to decide this issue because Plaintiffs failed to present evidence from which a jury could reasonably conclude that the FDA would have approved the generic drugs earlier if the Citizen Petition had

been limited to the successful, non-sham requests. Finally the court analyzed the claims against GKS. The court found that GKS acted independently and although the parties shared a common interest, the evidence did not support a conclusion that GKS conspired with Biovail in violation of the antitrust laws.