Mylan, Teva Pharmaceuticals and other generic-drug manufacturers on Friday slammed antitrust claims brought by drug buyers in New York federal court over an alleged conspiracy to jack up the price of generic blood pressure medication propranolol, arguing that the buyers haven’t plausibly shown there was a price-fixing conspiracy.
The drugmakers said that the direct purchaser plaintiffs’ consolidated amended complaint, even after weeks of fact-finding efforts, still fail to support their claim that the companies developed a price-fixing scheme around propranolol. The new complaint has charts and graphs that aim to illustrate the alleged price increase and has added claims about the defendants’ attendance at trade shows and industry events, but still falls short of plausibly describing a conspiracy, they said.
“It does not matter how many trade shows or events the [plaintiffs] identify because courts have universally recognized that membership and participation in trade associations and industry events does not give rise to a plausible conspiracy claim,” the companies said. “And the pricing information in the [plaintiffs’] charts and graphs likewise shows nothing about a purported conspiracy.”
The buyers rely on allegations about the characteristics of the generic pharmaceutical market to support their claim that the drugmakers had a reason to conspire, but haven’t yet identified a specific motive as to why the named defendants would want to fix the price of propranolol, the drugmakers said.
At most, the allegations describe “follow-the-leader” pricing, in which each company set the price of its product at the same level of its competitors — a strategy that the Second Circuit and other courts have said can’t be used as a basis for a conspiracy, the defendants said.
The plaintiffs have also pointed to other government investigations into generic drug pricing, but the drugmakers said Friday that these proceedings involve different alleged conspiracies, different products and nearly completely different defendants, thus offering no link between the government’s efforts and the instant suit. Without that link, any mention of what the government is doing doesn’t add plausibility to the drug buyers’ claims, the companies said.
The U.S. Department of Justice has intervened in the instant suit, as it’s concerned that the case could interfere with a criminal investigation.
As for the trade shows serving as a spawning point for price-hike agreements — an allegation that has come up frequently in claims of price-fixing for generic drugs — the drugmakers said the buyers haven’t come up with one communication between the defendants at any of the relevant events or shown that they actually spoke with one another while in attendance, let alone about propranolol pricing.
“Given the benefit of every doubt, the [plaintiffs’] allegations, at most, support an inference that prices for propranolol increased based on lawful, independent conduct by defendants,” the drugmakers said. “Every court to have addressed such allegations has held that they are plainly insufficient to survive a motion to dismiss.”
The plaintiffs could not be reached for comment Monday.
The drugmakers are represented by Kirkland & Ellis LLP, Wilson Sonsini Goodrich & Rosati, Kasowitz Benson Torres & Friedman LLP, Gibson Dunn, Morgan Lewis & Bockius LLP and Williams & Connolly LLP.
The plaintiffs are represented by Nussbaum Law Group PC, Kaplan Fox & Kilsheimer LLP, Hagens Berman Sobol Shapiro LLP and Vanek Vickers & Masini PC.
The case is In re: Propranolol Antitrust Litigation, case number 1:16-cv-09901, in the U.S. District Court for the Southern District of New York.