A Massachusetts federal judge has teed up Takeda Pharmaceutical for trial next year on claims from health insurers, self-insured employers, retailers and wholesalers accusing it of paying Par Pharmaceuticals to delay generic competition to anticonstipation drug Amitiza, rejecting competing motions from the drugmaker and plaintiffs for early wins.
U.S. District Judge Myong J. Joun's opinion Wednesday refused the plaintiffs' motion to find that Takeda has market power or that the deal with Par was anticompetitive, concluding both issues present factual disputes that should go to the jury in a trial currently set for April. Perhaps more importantly, Judge Joun found similar disputes short-circuited Takeda's bid for a finding that there was no anticompetitive agreement and that drug buyers can't trace any overcharges to the Par deal.
"Neither party has presented such one-sided extrinsic evidence that can lead me to grant summary judgment regarding the meaning of this ambiguous contract," Judge Joun said, preferring to leave interpretation of that contract, and whether it amounted to an anticompetitive payoff, up to the jury.
Amitiza is an anticonstipation drug often taken to help treat side effects of irritable bowel syndrome or chronic constipation that can be caused by opioid use. The drug was first approved by the U.S. Food and Drug Administration in 2006. By 2010, generic drug maker Par was asking the agency for permission to make a generic, prompting Takeda to sue it for patent infringement, according to the litigation.
Takeda and Par resolved the infringement litigation in a 2014 settlement that also involved Sucampo Pharmaceuticals Inc., the developer of Amitiza active ingredient lubiprostone.
Under that deal, according to Wednesday's 110-page decision, Par was permitted as of 2021 to market an authorized generic, or AG, of Amitiza, instead of striking out on its own through a generic drug application to the FDA called an abbreviated new drug application, or ANDA. The deal required Par to split the profits with Takeda and Sucampo 50-50, at least until another generic hit the scene, which would reduce the share. The share would go down to zero if more than one hit shelves. According to the ruling, the defendants contend the share reduction would kick in only under specific circumstances.
According to Wednesday's ruling, much of the case centers on the exact incentives created by the 50-50 split. The plaintiffs said the profit-sharing dissuaded Takeda from launching its own authorized generic that would have competed with Par's version and driven down costs — amounting to a so-called no-AG deal where the brand maker's promise not to compete with the generic is treated as an anticompetitive reverse payment. They also argue that the profit-sharing disincentivized Sucampo from fielding its own authorized generic because the payouts outweighed profits from launching another competitor.
Looking at Takeda's assertions that the profit-sharing can't be anticompetitive, in part because the money was flowing from generic to brand maker, Judge Joun said Wednesday that the settlement "is ambiguous as to whether the declining royalty structure applies regardless" of whether Par launches an AG or an ANDA. He also found "sufficient competing evidence as to whether Takeda/Sucampo and Par agreed to enter into an implicit no-AG agreement based on the 50% profit split alone."
Judge Joun said Takeda can't disconnect claims of overcharges by contending that the plaintiffs haven't shown that Par would have been able to beat any patent infringement claims and win ANDA approval from the FDA, or that other ANDA filers would have been able to launch their own generics.
In denying competing motions for summary judgment on the question of market power, Judge Joun found similar factual disputes over whether dramatic drops in drug prices following generic entry — from $5.74 per capsule to $0.63 in 2024 — showed that Takeda had been able to charge "supra-competitive prices" or that its margins were higher than they would be in a competitive environment. He found matters of margins and allegations that Takeda restricted output to amount to disputes that will come down to a battle of the experts. He similarly said that the jury should decide just how much Amitiza and its generic equivalent competed with similar constipation drugs.
In refusing to declare the 2014 settlement on its own anticompetitive, Judge Joun said that question "highly depends on the effects." And he signaled potential trouble for the plaintiffs, describing the settlement itself and the companies' understanding of it as "circumstantial evidence of a conspiracy at best."
"Here, plaintiffs have put forth evidence that defendants would be motivated to delay generic entry in order to avoid patent litigation costs and maintain supra-competitive prices," he said. "While this may be flimsy circumstantial evidence, a reasonable jury may still find that there is an implicit no-AG agreement, which could not have resulted from the independent actions of either Par or Takeda/Sucampo."
Less than two months after certifying classes of end-payor plaintiffs and wholesaler direct purchasers — suing alongside large retailers like Walgreen Co. and CVS Pharmacy Inc. — Judge Joun also refused Wednesday to grant Takeda summary judgment on arguments that 10 members of the direct purchaser class suffered no injury. According to the ruling, it doesn't matter whether some only ever bought brand Amitiza, or entirely stopped buying either brand or generic version before Par entered the market with a generic.
"As plaintiffs note, it is irrelevant whether brand-only direct purchasers actually purchased generic Amitiza when it became available, or whether brand Amitiza would have been cheaper absent the illegal conduct," Judge Joun said, concluding that its enough if a buyer incurred an overcharge.
Nor can Takeda limit damages claims under the statute of limitations that would bar claims from more than four years before the direct buyers filed suit in June 2021, according to the ruling. Instead, Judge Joun permitted claims going as far back as October 2016, when the plaintiffs contend a generic could have hit the market if not for the anticompetitive agreement. The judge tolled the statute of limitations under a theory of fraudulent concealment, rejecting defense assertions that any plaintiffs were put on notice through a 2014 announcement of the deal, an announcement the plaintiffs call misleading.
"While I agree with defendants that plaintiffs have not put forth evidence that they could not uncover the harm absent diligent efforts, it is unclear what evidence plaintiffs can provide. Indeed, it is defendants' right not to disclose the 'intimate details' of an anticompetitive agreement for suspicion to arise," Judge Joun said. "That does not change the fact that without key information—the 50/50 profit split and the declining royalty — plaintiffs could not have known of their claims."
Conversely, Judge Joun refused to let the plaintiffs nix Takeda assertions that there were "legitimate, procompetitive benefits" for the settlement.
"I follow the other courts in this district that hold that procompetitive benefits need not be limited to the challenged restraint. Further, I find that Takeda has proffered evidence of procompetitive benefits that creates a dispute of fact," he said.
Left untouched in Wednesday's decision was a separate and more recent defense motion for partial summary judgment contending state-specific claims from end purchasers are time-barred. Judge Joun said he'll address that motion in a different ruling. The end purchasers, represented by Premera Blue Cross, defended the state law claims earlier in October.
An attorney for the direct purchaser class, John D. Radice of Radice Law Firm PC, said in an email Thursday that the "court's thoughtful rulings are welcome, and we look forward to trial in April of 2026."
Counsel for the remaining parties did not immediately respond Thursday to requests for comment.
Premera Blue Cross and the end-payor class are represented by Peter St. Phillip, Uriel Rabinovitz and Renee A. Nolan of Lowey Dannenberg PC, Scott J. Tucker and William J. Fidurko of Tucker Dyer & O'Connell LLP and Courtney Finerty-Stelzner of Getnick & Getnick LLP.
The direct purchasers are represented by Thomas M. Sobol, Erin C. Burns, Jessica R. MacAuley, Daniel Polonsky and Mark T. Vazquez of Hagens Berman Sobol Shapiro LLP, Michael L. Roberts and Stephanie E. Smith of Roberts Law Firm US PC, and John D. Radice and April Lamber of Radice Law Firm PC.
Walgreen Co., Albertsons Companies, Inc., H-E-B LP and The Kroger Co. are represented by Scott E. Perwin, Lauren C. Ravkind and Anna T. Neill of Sperling Kenny Nachwalter LLC.
CVS Pharmacy Inc. is represented by Barry L. Refsin, Eric L. Bloom and Caitlin V. McHugh of Hangley Aronchick Segal Pudlin & Schiller.
Takeda is represented by Fred Kelly, Joshua Barlow, Andre Geverola, Laura Shores, Wallace Wu, Assad H. Rajani, Katie J.L. Scott, Ada Añon, Michael H. Sapiro, Matthew M. Wilk and Sam Sullivan of Arnold & Porter Kaye Scholer LLP, and Mike Brockmeyer, David S. Shotlander, Ralph E. Labaton and Aakruti G. Vakharia of Haug Partners LLP.
The case is In re: Amitiza Antitrust Litigation, case number 1:21-cv-11057, in the U.S. District Court for the District of Massachusetts.
Oct 30
Deal Summary
