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In re: Nifedipine Antitrust Litigation.

The opinion of the court was delivered by: RICHARD LEON, District Judge


Before the Court are the Joint Motion of Elan and Biovail to Dismiss the Complaints and Teva's Motions to Dismiss the Consolidated Class Action Complaints. Upon consideration of the defendants' motions, the plaintiffs' oppositions, the defendants' replies, the various supplemental filings of both parties and the entire record herein, the Court GRANTS IN PART and DENIES IN PART the defendants' motions to dismiss. Specifically, the Court grants the motion to dismiss the claims for injunctive relief for lack of subject matter jurisdiction. Because the Court lacks jurisdiction over the End-Payor Plaintiffs' sole federal claims, the Court likewise lacks jurisdiction over, and must dismiss, the End-Payor Plaintiffs' state law claims.


  A. The Parties

  The defendants in this case, Biovail Corporation, Elan Corporation, and Teva Pharmaceutical Industries (collectively "the defendants"), are pharmaceutical companies involved in the manufacture and distribution of generic Adalat CC, a once-a-day prescription drug used in the treatment of hypertension. Sherman Act Second Consolidated Amended Class Action Complaint ("SACC") ¶¶ 13-15; End-Payor Consolidated Amended Class Action Complaint ("EPCC") ¶¶ 15-21. The plaintiffs in this case fall into three general categories. The Sherman Act Class Plaintiffs are comprised of companies, such as retail and wholesale drug stores and distributors, that bought generic Adalat CC from the defendants.*fn1 SACC ¶¶ 7-12. The Sherman Act Non-Class Plaintiffs include major national drug store chains that purchased generic Adalat CC from the defendants.*fn2 The End-Payor Plaintiffs include health and benefit funds for unions, an HMO, a consumer advocacy group, and one individual user of generic Adalat CC.*fn3 EPCC ¶¶ 7-14. Although the End-Payor Plaintiffs purchased generic Adalat CC, they did not purchase it directly from any of the defendants. Id. The plaintiffs bring this antitrust action alleging that Biovail, Elan, and Teva conspired to allocate the sales of generic Adalat CC so as to reduce competition among the generics and the branded drug and to artificially, and illegally, inflate prices for both. SACC ¶ 2. The plaintiffs seek treble damages and injunctive relief.

  B. Regulatory History of Generic Adalat CC and the Agreement Between Biovail and Elan

  Nifedipine, the drug at the center of this litigation, is a coronary vasodilator used for the treatment of hypertension. SACC ¶ 31; EPCC ¶ 48. Bayer Corporation holds an approved New Drug Application ("NDA")*fn4 for an extended release formulation of nifedipine that it sells under the name Adalat CC®*fn5 SACC ¶ 34; EPCC ¶ 52. Adalat CC is marketed in the United States in 30 mg, 60 mg, and 90 mg dosages.*fn6 EPCC ¶ 57. Bayer's Adalat CC extended release tablets are subject to two United States patents. Id.

  On April 30, 1997, Elan filed the first Abbreviated New Drug Application ("ANDA") with the Food and Drug Administration ("FDA"), seeking approval to produce a generic version of 30 mg Adalat CC. SACC ¶ 37; EPCC ¶ 58. In its ANDA, Elan certified that its manufacture, use, sale, or importation of the 30 mg generic Adalat CC either would not infringe on any of Bayer's patents or that the patents were invalid.*fn7 SACC ¶¶ 28, 37; EPCC ¶ 63. On August 22, 1997, Bayer filed a patent infringement suit against Elan.*fn8*fn9 SACC ¶ 38; EPCC ¶ 64. Under FDA regulations, Elan's ANDA was put on hold pending the resolution of the patent suit. SACC ¶ 38; EPCC ¶ 64. With that suit pending, Biovail filed on ANDA on December 9, 1997 for generic versions of 30 mg and 60mg Adalat CC. SACC ¶ 39; EPCC ¶ 65. Six days later, on December 15, 1997, it entered into an exclusive agreement with Teva for the marketing and distribution of its products in the United States ("the Biovail/Teva Agreement").

  On March 16, 1999, the United States District Court for the Northern District of Georgia found that Elan's 30 mg generic product did not infringe Bayer's patent. SACC ¶ 40. Two months later, the FDA, on May 28, 1999, notified Elan that it had tentatively approved Elan's ANDA for 30 mg generic Adalat CC. SACC ¶ 43; EPCC ¶ 68. A month later, on June 29, 1999, the FDA tentatively approved Biovail's ANDA for 30mg and 60 mg Adalat CC generics. SACC ¶ 43; EPCC ¶ 69. The next day, June 30, 1999, Elan filed an ANDA to produce a 60mg generic for Adalat CC. SACC ¶ 44; EPCC ¶ 70. However, on October 4, 1999, while still awaiting final approval on its 30 mg generic, Biovail entered into an exclusive agreement to market and distribute Elan's 30 mg generic ("the Distribution Agreement"), which had only been tentatively approved by the FDA four weeks earlier than Biovail's 30 mg generic. SACC ¶ 45; EPCC ¶ 71. In exchange for the marketing and distribution rights, Biovail agreed to pay Elan at least $73.5 million over a six-year period. Id.

  On March 10, 2000, the FDA granted a final approval of Elan's 30mg generic. SACC ¶ 48; EPCC ¶¶ 58, 60, 72. Three days later, on March 13, 2000, Biovail announced that, pursuant to a Distribution Agreement with Elan, it would launch Elan's 30 mg generic Adalat CC, using Teva as the exclusive U.S. Distributor.*fn10 SACC ¶ 49; EPCC ¶ 73. Under FDA regulations, Elan received a 180-day period of market exclusivity because it was the first ANDA filer to receive approval for the 30mg generic. SACC ¶ 29.

  On December 4, 2000, the FDA granted final approval to Biovail for its 30 mg and 60 mg generic Adalat. SACC ¶ 53; EPCC ¶¶ 59, 77. Immediately thereafter, Biovail launched a 60 mg generic version of Adalat CC. SACC ¶ 53; EPCC ¶ 77. As the first filer on the 60 mg generic, Biovail qualified for the 180-day period of exclusivity, which ran until approximately June 4, 2001. SACC ¶ 59. Although Elan's period of market exclusivity for the 30 mg generic had expired by that point in time, Biovail chose not to launch its own 30 mg generic, continuing to distribute Elan's 30 mg generic product. SACC ¶ 53.

  On March 20, 2001, the FDA tentatively approved Elan's 60 mg generic. SACC ¶ 56. Final approval was granted October 26, 2001, more than four months after Biovail's period of market exclusivity on the 60 mg dosage had expired. SACC ¶ 60; EPCC ¶ 84. However, Elan chose not to launch a 60 mg product at that time. SACC ¶ 60. Indeed, although both Biovail and Elan were legally entitled to produce a generic version of 60 mg Adalat CC by October 26, 2001, and both companies were similarly legally able to produce a generic version of 30 mg Adalat CC by December 4, 2000, neither did. SACC ¶¶ 61, 63; EPCC ¶¶ 84, 87. Biovail only produced a 60 mg product and Elan only produced a 30 mg product, which Biovail exclusively distributed. According to the plaintiffs, neither product had any direct competition and both products were exclusively distributed through Teva. SACC ¶ 63.

  The plaintiffs allege that the exclusive Distribution Agreement between the parties entered into on October 4, 1999 precluded Elan from selling generic Adalat products in competition with Biovail and Teva. SACC ¶ 45; EPCC ¶ 71. The plaintiffs also allege that Teva participated in the negotiations with Biovail and Elan and that, as a result of the Biovail/Teva Agreement, Teva became the exclusive marketing and distribution agent for Elan in the United States. SACC ¶ 47.

  The plaintiffs further allege that, but for the Distribution Agreement among the defendants, Biovail would have introduced a 30 mg generic as of December 4, 2000, when the FDA approved Biovail's ANDA. SACC ¶ 54. Similarly, plaintiffs allege that Elan would have introduced a 60 mg generic as of October 26, 2001, when the FDA approved Elan's ANDA. SACC ¶ 60. In either case, had either company that received the second approval brought a product to market, the new competition would have resulted in lower prices to consumers. Thus, the alleged effect of the agreement ...

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