The Third Circuit, by unanimous decision, recently affirmed class certification for direct purchasers of the opioid addiction treatment Suboxone in an antitrust case alleging that Reckitt Benckiser (now Indivior) took several actions to suppress competition from generic versions of Suboxone, including reformulating Suboxone into a film for which generic versions of Suboxone tablets could not be substituted by pharmacists (commonly known as a “product hop”). See In re Suboxone (Buprenorphine Hydrochlorine & Naloxone) Antitrust Litig., No. 19-3640, 2020 WL 4331523 (3d Cir. July 28, 2020). Faruqi & Faruqi’s Peter Kohn tackled the oral argument before the Third Circuit.
On September 26, 2019, Judge Mitchell S. Goldberg of the United States District Court for the Eastern District of Pennsylvania certified a class of direct purchasers of Suboxone in what the Third Circuit deemed a “thorough, thoughtful, and well-reasoned opinion,” and appointed Faruqi & Faruqi as Co-Lead Counsel. Id. at *1. Reckitt appealed with several arguments that were all rejected.
First, Reckitt claimed that direct purchasers’ common evidence of injury and damages did not match their theory of liability. Reckitt argued that it could “lawfully raise the prices on Suboxone tablets and change its rebate program” to favor Suboxone film. Id. at *3. The Third Circuit found this blinkered argument unpersuasive. It acknowledged that the direct purchasers’ case theory “is not simply that Reckitt’s pricing of brand tablets individually caused harm.” Id. at *4. Rather, the “totality of Reckitt’s actions” must be considered, which included: “raising prices, withdrawing tablets from the market, providing rebates only for film, disparaging the safety of tablets, and delaying the generics’ entry by filing a citizen petition and not cooperating in the REMS process.” Id. This conduct, provable by common evidence, injured the direct purchasers by “having to pay more for brand Suboxone products when less-expensive generic tablets should have been available but were not because of Reckitt’s actions.” Id.
Next, Reckitt took issue with the direct purchasers’ calculation of aggregate damages, arguing that “the eventual need for individualized damages inquiries defeats predominance.” Id.
The Third Circuit bluntly called this argument “incorrect” because it is well settled that “[a]ntitrust plaintiffs may satisfy the predominance requirement by using a model that estimates the damages attributable to the antitrust injury, even if more individualized determinations are needed later to allocate damages among class members.” Id.
Lastly, Reckitt advanced a “speculative” argument that Burlington Drug Co. is not an adequate class representative for the direct purchasers, which the Third Circuit easily dismissed. Id. at *5. Upon examination, the Third Circuit noted that “Burlington is not a disengaged representative. The record shows that Burlington is aware of its role as a fiduciary, understands the basis for the claimed injury, has an incentive to recover its proportionate share of damages, monitors the litigation, produced documents, and has the requisite interest in and knowledge about the case to satisfy the adequacy requirement.” Id. at *6.
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Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour, personal injury and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Delaware, Georgia and Pennsylvania.
Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, direct purchasers, consumers and employees.
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About David Calvello
David Calvello is a Senior Associate in Faruqi & Faruqi, LLP's New York office. He mainly practices in the area of antitrust litigation with a focus on competition in the pharmaceutical industry. He has worked on multiple cases that resulted in significant settlements, including In re Lidoderm Antitrust Litigation, 14-md-02521 (N.D. Cal.) ($166M settlement) and In re Solodyn Antitrust Litigation, 14-md-02503 (D. Mass.) ($76M settlement).