June 21, 2018

AndroGel Litigation Finally Ready for Trial, But Plaintiffs’ Paths to Proving Causation Curtailed

Holland & Knight Antitrust and Competition Blog
David C. Kully | Charles A. Weiss

Five years after the U.S. Supreme Court found in FTC v. Actavis, 570 U.S. 136 (2013), that large and unjustified payments from a brand pharmaceutical manufacturer to prevent generic entry can provide a basis for an antitrust claim (and almost 10 years after the FTC first initiated the suit), the underlying case now appears ready for trial. The case concerns payments by Solvay to two generic manufacturers that delayed the release of generic versions of Solvay's AndroGel, a prescription topical gel used to treat low testosterone in men. On June 14, Judge Thomas W. Thrash of the U.S. District Court for the Northern District of Georgia issued an opinion and order denying—with one narrow exception—the defendants' motions for summary judgment on the FTC's and private plaintiffs' claims.

The court also, however, narrowed substantially the avenues available to the private plaintiffs to prove that the defendants' reverse-payment patent litigation settlements prevented the release of lower-cost generics and caused their injuries. As we previously observed, appellate courts that have focused on this issue recently have determined that, where a lawful generic launch would be precluded by patents held by the brand manufacturer, one avenue available to plaintiffs to prove that the settlement actually caused a delay in the release of the generic is to show that the generic manufacturer would have prevailed in the underlying patent litigation that was the subject of the challenged reverse-payment settlement.

The decision blocked that avenue for the private plaintiffs in the AndroGel case, finding it "simply too procedurally burdensome and speculative" to have a jury determine which side would have prevailed in the underlying patent litigation. Here, because Judge Thrash himself also presided over the underlying patent litigation that was resolved through the reverse-payment settlement challenged as anticompetitive, he was well situated to observe how predictions of its outcome could "only be characterized as pure speculation" and not something that could "possibly serve as the basis for a reasonable decision for a jury."

Judge Thrash did not accept the approach of some recent decisions of other courts that framed the question as whether the generic manufacturer "could have won" the patent litigation, rather than whether it "would have won." He explained that "evidence that the Generics could have won gets us no closer than we are now to answering the question of whether the Generics would have been able to enter the market in a but-for world, or if a valid patent would have prevented them."

The court did not, however, block all paths to proof that the reverse-payment settlement actually delayed release of a generic version of AndroGel. It left open the possibility that the private plaintiffs could meet their burden by showing that Solvay and the generic manufacturers would have settled on terms that allowed an earlier generic entry absent the allegedly large and unjustified payment from Solvay.

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