Case 1:19-cv-01461-LPS Document127 Filed 03/11/22 Page 1 of 50 PagelD #: 3504
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`THIS DOCUMENTRELATES TO;
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`C.A. No. 19-md-2895-LPS
`
`MDLNo. 2895
`
`
`
`IN RE: SENSIPAR (CINACALCET
`
`HYDROCHLORIDE TABLETS)
`ANTITRUST LITIGATION
`
`
`
`
`ALL DIRECT PURCHASER ACTIONS
`
`C.A. No. 19-396-LPS
`C.A. No. 19-1460-LPS
`
`
`
`ALL INDIRECT PURCHASER ACTIONS
`C.A. No. 19-369-LPS
`
`C.A. No. 19-1461-LPS
`
`
`Tiffany J. Cramer, CHIMICLES SCHWARTZ KRINER & DONALDSON-SMITH LLP,
`Wilmington, Delaware
`
`Thomas M.Sobol and Bradley J. Vettraino, HAGENS BERMAN SOBOL SHAPIRO LLP,
`Cambridge, Massachusetts
`
`Linda P. Nussbaum, Bart D. Cohen, and Peter Moran, NUSSBAUM LAW GROUP,P.C., New
`York, New York
`
`Dianne M.Nast and Michael Tarringer, NASTLAW LLC,Philadelphia, Pennsylvania
`
`Mike Roberts, ROBERTS LAW FIRM,P.A., Little Rock, Arkansas
`
`John Radice, Daniel Rubenstein, and Kenneth Pickle, RADICE LAW FIRM,P.C., Princeton,
`New Jersey
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`Attorneysfor Direct Purchaser Plaintiffs
`
`Ian ConnorBifferato, THE BIFFERATOFIRM,P.A., Wilmington, Delaware
`Karin E. Garvey and Matthew J. Perez, DICELLO LEVITT GUTZLER, New York, New York
`
`Lee Albert, GLANCY PRONGAY & MURRAYLLP, New York, New York
`
`Todd A. Seaver, BERMAN TABACCO,San Francisco, California
`
`Melinda R. Coolidge, HAUSFELD LLP, Washington, District of Columbia
`Adam J. Pessin, FINE, KAPLAN AND BLACK,R.P.C., Philadelphia, Pennsylvania
`
`Attorneysfor Indirect Purchaser Plaintiffs
`
`

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`Case 1:19-cv-01461-LPS Document 127 Filed 03/11/22 Page 2 of 50 PagelD #: 3505
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`Jack B. Blumenfeld and Brian P. Egan, MORRIS, NICHOLS, ARSHT & TUNNELL LLP,
`Wilmington, Delaware
`Eric J. Stock, Lauren Myers, and Joshua J. Obear, GIBSON, DUNN & CRUTCHER LLP, New
`York, New York
`
`Ashley E. Johnson, GIBSON, DUNN & CRUTCHERLLP,Dallas, Texas
`
`Attorneysfor Defendant Amgen, Ine.
`
`John W. Shaw, Karen E. Keller, and Nathan R. Hoeschen, SHAW KELLER LLP, Wilmington,
`Delaware
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`Henninger 8. Bullock, Richard A. Spehr, Niketa K. Patel, and Nicolas E. Rodriguez, MAYER
`BROWN LLP, New York, New York
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`Attorneysfor Defendants Teva Pharmaceuticals USA, Inc., Watson Laboratories, Inc.,
`and Actavis Pharma Inc.
`
`.
`
`OPINION
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`March 11, 2022
`Wilmington, Delaware
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`

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`Case 1:19-cv-01461-LPS Document 127 Filed 03/11/22 Page 3 of 50 PagelD #: 3506
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`
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`U.S. District Judge:
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`Pending before the Court are: (1) Defendant Amgen Inc.’s (“Amgen”) motion (D.L. 209)!
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`to dismiss the End PayorPlaintiffs’ (“EPPs”)* second amended consolidated class action
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`complaint (D.1, 202), filed pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(6)(6);
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`(2) Amgen’s motion (D.I. 211) to dismiss the Direct Purchaser Plaintiffs’ (“DPPs”)? second
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`amended consolidated class action complaint (D.I. 195), filed pursuant to Rule 12(b)(6); and
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`(3) Defendants Teva Pharmaceuticals USA,Inc., Watson Laboratories, Inc., and Actavis Pharma,
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`Inc.’s (collectively, “Teva”) motion (D.I. 213) to dismiss both the DPPs’ second amended
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`consolidated class action complaint and the EPPs’ second amended consolidated class action
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`complaint, filed pursuant to Rules 12(b)(1) and 12(b)(6).*
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`I.
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`BACKGROUND
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`This multi-district litigation (“MDL”) relates to a drug with the active ingredient
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`cinacalcet hydrochloride. Cinacalcet hydrochloride is used to treat secondary
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`hyperparathyroidism and hypercalcemia in patients with certain medical conditions.
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`(D.L. 195
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`{ 64; D.I. 202 | 64) Amgen has marketed cinacalcet underthe brand name “Sensipar” since
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`2004. (DI. 195 4 65; D.I. 202 § 65) Sensipar has earned Amgensales of over $1 billion
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`annually since 2015. (D.I. 195 485; D.I. 202 { 69)
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`! Unless otherwise specified,all citations to the docket index refer to C.A. No. 19-md-2895.
`
`2 The End PayorPlaintiffs are also referred to as the Indirect PurchaserPlaintiffs. They include:
`UFCW Local 1500 Welfare Fund, Teamsters Local 237 Welfare Fund, Teamsters Local 237
`Retirees’ Benefit Fund, and Teamster Western Region & Local 177 Health Care Plan. (See DI.
`202 ff 19-21}
`
`3 The Direct PurchaserPlaintiffs include: César Castillo, LLC and KPH Healthcare Services,
`Inc., a.k.a. Kinney Drugs, Inc. (See DL. 195 {§ 16, 17)
`
`4 Teva also joins both of Amgen’s motions to dismiss. (See D.I. 216)
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`

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`Amgenheld an exclusive license to now-expired U.S. Patent No. 6,011,068 (the “’068
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`patent”), which waslisted in the Orange Book? in connection with Sensipar and covered the
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`cinacalcet drug substance. (D.I. 195 {{] 66-69; D.I. 202 {{ 66, 67, 70) As early as March 2008,
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`generic manufacturers began filing abbreviated new drug applications (“ANDAs”) to market
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`generic versions of Sensipar. (D.I. 195 § 84; D.I. 202 76) Several of these early ANDAfilers
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`received tentative approvals from the U.S. Food and Drug Administration (“FDA”) before the
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`March 8, 2018 expiration date of the ’068 patent. (D.I. 195 §{ 95-98; D.I. 202 4] 92-95)
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`Because these early filers’ challenges to the ’068 patent were unsuccessful, they were prohibited
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`from entering the generic cinacalcet market until after the expiration of that patent. (D.I. 195
`
`{ 73; D.I. 202 4 79)
`On June 28, 2016, Amgen obtained U.S. Patent No. 9,375,405 (the “’405 patent’), which
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`covers formulations of cinacalcet. (D.I. 195 99] 74, 75; D.I. 202 J 74) The °405 patent expires on
`September 22, 2026. (D.I. 195 § 66; D.I. 202 4 70) Amgen added the ’405 patent to the Orange
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`Booklisting for Sensipar; almost as soon asit did, generic manufacturers beganto challengeit.
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`By June 2017, more than 20 generic manufacturers had filed ANDAscontaining paragraph IV
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`certifications, representing to the FDA that the 405 patent was invalid, unenforceable, or would
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`notbe infringed by their generic products. (DI. 195 {{[ 83, 86, 87; D.I. 202 {J 76, 77) Under the
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`circumstances, none of the ANDAfilers would have been entitled to 180-day first-filer
`
`5 A drug manufacturer holding an approved new drugapplication (“NDA”) is required to notify
`the FDA ofcertain categories of drug-related patents “for which a claim of patent infringement
`could reasonably be asserted if a person notlicensed by the owner of the patent engaged in the
`manufacture, use, or sale of the drug.” 21 U.S.C. §§ 355(b)(1)(A)(viii) and (c)(2). The FDA
`lists such patents in the “Approved Drug Products with Therapeutic Equivalence Evaluations,”
`also known asthe “Orange Book.” See Andrx Pharms., Inc. v. Biovail Corp., 276 F.3d 1368,
`1371 (Fed. Cir, 2002).
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`

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`exclusivity.® (D.L. 195 § 132; D.L 202
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`122) Between September 2016 and June 2017, Amgen
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`broughta series of lawsuits in this Court against these ANDAfilers,alleging that the proposed
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`generic products would infringe the ’405 patent. (D.I. 195 {J 89, 93; D.1. 202 ff] 86, 90)
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`Beginning in September 2017, Amgen settied most of these suits asserting the °405
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`patent, starting with the ANDAfilers who had the weakest cases(i.¢., those filerswho were least
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`likely to prove non-infringement, invalidity, or unenforceability of the ’405 patent). (D.I. 195
`
`q 100, 109-16; D.I. 202 {J 97, 104-11) The agreements pursuant to which these cases were
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`settled required that the settling defendants (1) admit to infringement of the ’405 patent and
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`(2) promise not to launch their generic versions of Sensipar before a specified and agreed entry
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`date (which wasa date prior to the expiration of the 405 patent). (D.I. 195 101; D.L. 202 4 98)
`The agreed entry dates varied amongthe settling defendants. (See, e.g., DI. 195 {J 109, 113,
`
`135; D.I. 202 ff] 107, 109, 131)
`
`Eachof the settlement agreements also included an “acceleration” clause that would
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`allow the settling defendants to enter the cinacalcet market before their agreed entry dates if
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`another generic manufacturer entered the cinacalcet market without authorization from Amgen;
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`that is, if another generic manufacturer launched its generic version of Sensipar “at risk” of being
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`liable for patent infringement. (D.I. 195 4 101-03; D.I. 202 98-100) Each ofthe acceleration
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`provisionsalso included a 10-day “grace”period, during which Amgen could avoid triggering
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`the acceleration clauses — in other words, Amgen could preventthe settling generic
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`manufacturers from having their agreed entry dates accelerated — by either seeking a preliminary
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`6 As an incentive for generic pharmaceutical companies to challenge the Orange Book-listed
`patents, the first company to submit an ANDA with a paragraph IV certification may be granted
`a 180-day period of generic marketing exclusivity, during which time the FDA will not approve
`a later-filed ANDA based on the same NDA. See 21 U.S.C. § 355()(5)(B)(iv); see also Janssen
`Pharm., N.V. v. Apotex, Inc., 540 F.3d 1353, 1356 (Fed. Cir. 2008).
`
`

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`injunction against the at-risk launcher or by reaching an agreementwith theat-risk launcherto
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`take its generic cinacalcet product off the market. (D.I. 195 § 103; D.I. 202 { 100)
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`In March 2018, as the ’068 patent expired, and the FDA grantedfinal approval to several
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`ANDAs~ but noneof the generic manufacturers holding an approved ANDAlaunchedits
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`cinacalcet product at that time. (DI. 195 ff 178-82; D.I. 202 fff 134, 135, 163) Meanwhile, also
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`in March 2018, the non-settled lawsuits asserting the °405 patent went to trial before the
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`Honorable Mitchell S. Goldberg,sitting by designation here in the District of Delaware.
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`Specifically, Amgen’s cases were tried against four ANDAfilers: Watson Laboratories, Inc.
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`(“Watson”), Piramal Healthcare UK Ltd. (“Piramal”), Amneal Pharmaceuticals LLC
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`(“Amneal”), and Zydus Pharmaceuticals (USA) Inc. (“Zydus”). (D.I. 195 4 171; DI. 202 4 158)
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`Following a four-day benchtrial, Judge Goldberg issued an opinion on July 27, 2018, finding
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`that the ANDAsof Watson, Piramal, and Amnealdid not infringe any of the asserted claims of
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`the 405 patent while Zydus’ ANDAdid infringe some ofthe asserted claims.
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`(D.1. 195 {J 172,
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`173; DJ. 202 4f 161, 162; see also AmgenInc. v. Amneal Pharms. LLC, 328 F. Supp. 3d 373 (D.
`
`Del. 2018)) The Court entered final judgment on August 24, 2018. (D.I. 195 174; D.I. 202
`
`q 164) Amgen and Zydus appealed the judgments to the Court of Appeals for the Federal
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`Circuit. (D1. 195 § 177; DL. 202 { 166)
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`On December 27, 2018, while these appeals were pending, the FDA approved Watson’s
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`ANDA,
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`(D.1. 195 4 183; D.I. 202 1170) The next day, Teva —- which owns Watson’s ANDA’—
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`launched Watson’s approved generic cinacalcet productat risk. (D.I. 195 184; D.I. 202 { 170)
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`Overthe next several days, Teva sold and shipped more than 409,000 bottles of the product to
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`7 Hence, any reference in this Opinion to “Teva’s” product is a reference to Watson’s productas
`approved by the FDA,
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`

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`wholesalers, which was sufficient supply to satisfy 1.6 to 3.6 months ofthe entire U.S. market
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`demand. These several days of sales generated revenues of approximately $393 million, netting
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`approximately $213 million in profits. (DJ. 195 4 184, 187; D.[. 202 {J 170, 171)
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`Within less than a week, on January 2, 2019, Amgen and Teva reached a settlement(the
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`“Amgen-Teva Agreement”). (D.I. 195 § 189; D.I. 202 4 180) Pursuant to the Amgen-Teva
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`Agreement, Teva agreed to immediately cease sales of its generic cinacalcet product and notto
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`resumesales until June 30, 2021 (five years before the *405 patent was set to expire) — all subject
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`to the operation of an acceleration clause that would permit Teva to reenter the market sooner
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`than the agreed-upon date if another generic manufacturer launchedatrisk. (D.I. 195 § 190; D.L.
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`
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`202 4 193)
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`Under the Amgen-Teva Agreement, Teva was not required to remove from the market
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`any of the productit had distributed during the at-risk launch. It was, however, required to pay
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`Amgenan initial payment of $10 million followed by additional payments that might bring the
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`total amount paid by Teva to Amgento as much as $40 million. Teva’s additional payments
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`would not be required if another generic cinacalcet product entered the market.
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`(D.1. 195 { 190;
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`DI. 202 fff 180-82, 193}
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`Amgen and Tevaalso agreed to jointly request that Judge Goldberg issue an indicative
`ruling vacating the non-infringement finding with respect to the Watson generic cinacalcet
`productandenter the parties’ proposed consent judgment — including Teva’s admission of
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`infringement — if the Federal Circuit, upon the parties’ notification that Judge Goldberg would
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`grant their request for an indicative ruling, would remand the case for that purpose. (D.I. 195 ff
`192, 193; D.I. 202 4] 194, 195) Judge Goldberg later denied Amgen and Teva’s request. (DL.
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`195 § 196; D.I. 202 J 216)
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`

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`On January 4, 2019, two daysafter execution of the Amgen-Teva Agreement, counsel for
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`Amgen wrotea letter to counsel for Cipla Ltd. (“Cipla”) — another ANDAfiler secking approval
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`to market a generic cinacalcet product — asking Cipla to confirm that it would not engage in an
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`at-risk launch based on Teva’s launch.
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`(D.I. 195 § 207; D.I. 202 | 204) Amgenalso notified
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`Cipla that, if Cipla launchedits productat risk, Amgen would exerciseits rights and pursue the
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`remedies available to it undertheir settlement agreement (the “Amgen-Cipla Agreement”).
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`(D.L
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`195 7 207; D.I. 202 {| 204)
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`On January 8, 2019, Cipla filed a lawsuit against Amgen (the “Cipla action,” C.A. No.
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`19-44-LPS)in this Court, seeking a declaratory judgmentthat it was entitled to launch its generic
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`cinacalcet product under the terms the “Amgen-Cipla Agreement.” (D.I. 195 210; D.f. 202
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`4211) The Cipia actionalso alleged antitrust violations and patent misuse. (D.I. 195 {J 210-1 1;
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`D.J. 202211-12) After Cipla obtained a copy ofthe Amgen-Teva Agreement through
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`expedited discovery, Cipla amendedits complaint to add Teva as a co-defendant. (D.I. 195
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`4213; DL 202 4 214)
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`On March 6, 2019, while the Cipla action was pending, Cipla launchedatrisk, although
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`“not selling in anything like the volume it would sellif it did not havethis threat [from the
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`lawsuit by Amgen] hanging overit.” (D.I. 195 ff 214, 220; D.L 202 9] 215, 221) On March 11,
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`2019, Amgen movedin the Cipla action for a preliminary injunction, seeking to restrain Cipla’s
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`sales ofits generic cinacalcet product. (D.I. 195 | 216; D.L. 202 4 217) On May2, 2019, the
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`Court denied Amgen’s motion, finding Amgen wasnotlikely to succeed on the merits ofits
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`breach ofcontract claim because the Amgen-Cipla Agreement did not entitle Amgen to any
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`relief against Cipla’s launch of generic cinacalcet. See Cipla Ltd. v. Amgen Inc., 386 F. Supp. 3d
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`386, 400 (D. Del. 2019). On appeal the Third Circuit affirmed. See Cipla Lid. v. Amgen Inc.,
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`778 F. App’x 135 (3d Cir. 2019). Following the Court’s denial of Amgen’s motion for a
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`preliminary injunction in the Cipla action, several other manufacturers launched their generic
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`cinacalcet products. (D.I. 195 [ff 227-30, 232; D.I. 202 ff 226-29, 231)
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`In the meantime, between February 2019 and April 2019, the DPPs and the EPPs
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`(collectively, “Plaintiffs”) filed four class action antitrust lawsuits against Amgen and Teva
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`(collectively, “Defendants”) in the Eastern District of Pennsylvania, the District ofNew Jersey,
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`and the District of Delaware. On July 31, 2019, the Judicial Panel on Multidistrict Litigation
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`(“JPML”) centralized the Cipla action and the four class actions for coordinated pretrial
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`proceedings in this Court. (See D.I. 1; see also In re Sensipar (Cinacalcet Hydrochloride
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`Tablets) Antitrust Litig., 412 F. Supp. 3d 1344 (.P.M.L. 2019))
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`On September 13, 2019, the DPPs and the EPPsfiled consolidated class action
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`complaints on behalf of direct purchasers and indirect purchasers, respectively.
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`(See generally
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`D.L. 12, 13) On October 15, 2019, Amgen and Teva moved to dismiss both complaints. (See
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`DL. 27, 30, 31) On July 22, 2020, Magistrate Judge Hall issued a Report and Recommendation,
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`in which she recommendedthat the Court dismiss all of Plaintiffs’ federal and state law claims
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`without prejudice and with leave to amend. (See D.I. 157 at 25) On November30, 2020, the
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`undersigned Judge adopted in part Judge Hall’s Report and Recommendation,finding that
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`Plaintiffs’ claims based on the theory of an unlawful reverse payment from Amgen to Teva did
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`8 On February 21, 2019, UFCW Local 1500 Welfare Fund filed a class action antitrust complaint
`in this District on behalf of entities that indirectly purchased or provided reimbursementfor the
`purchase of cinacalcet. (See C.A. No. 19-369 D.L 1} On February 26, 2019, César Castillo, Inc.
`filed a class action antitrust complaint in this District on behalf of direct purchasers of cinacalcet.
`(See C.A. No, 19-396 D.I. 1) On March 14, 2019, Teamsters Local 237 Welfare Fund and
`Teamsters Local 237 Retirees’ Benefit Fund filed an indirect-purchaserclass action in the
`District of New Jersey. (See C.A. No. 19-1461 D.I. 1) On April 9, 2019, KPH Healthcare
`Services, Inc. filed a direct-purchaser class action complaint in the Eastern District of
`Pennsylvania. (See C.A. No. 19-1460 D.L. 1)
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`

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`not warrant dismissal. (D.I. 177 at 9-12) The Court agreed with Judge Hailthat Plaintiffs’
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`claims based on two other theories did not survive the motions to dismiss: (1) that the Amgen-
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`Teva Agreementdelayed the entry of generic manufacturers other than Teva (see id. at 6); and
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`(2) that the use of acceleration clauses deterred generic manufacturers from marketing generic
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`cinacalcet (see id. at 7). The Court granted Plaintiffs leave to amend the consolidated class
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`action complaints to include “only those claims and theories that remain[ed] in the case.” (Id. at
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`17; see also id. at 3 (“Plaintiffs are granted leave to file amended complaints, consistent with the
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`Report and this Order, provided that any such amended complaint mustbefiled no later than
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`December 30, 2020... .”) (internal emphasis omitted)) The Court also denied Amgen’s motion
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`directed solely to the EPPs’ state law claims, without prejudice to renew after the filing of any
`amended complaint. (id. at 3)
`|
`On February 16, 2021 and March 5, 2021, the DPPs and the EPPsfiled their respective
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`amended consolidated class action complaints.’ (See generally D.I. 195, 202) The DPPs’
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`amended consolidated class action complaint includes four counts under Sections ] and 2 of the
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`Sherman Act, 15 U.S.C. §§ 1 and 2. (See D.I. 195 {9 281-319) The EPPs’ amended
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`consolidated class action complaint includes three claims for injunctive and other equitable relief
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`under Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, as well as a series of state law
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`antitrust, unfair trade, consumer protection, and unjust enrichment claims. (See D.I. 202 {{] 276-
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`427)
`
`(D.L.
`9 The EPPs filed their amended consolidated class action complaints on February 16, 2021.
`196) The parties then stipulated to allow the EPPsto file the second amended consolidated class
`action complaint to include another end-payorplaintiff, Teamsters Western Region & Local 177
`Health Care Fund (“TWR”). (See D.L. 199) To avoid confusion, the Court will refer to the
`Plaintiffs’ second amended consolidated class action complaints (D.I. 195, 202) as their
`“amended consolidated class action complaints.”
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`
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`

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`On March 30, 2021, Amgen and Tevafiled the pending motions to dismiss. (See D.1.
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`209, 211, 213) The motions are fully and extensively briefed.
`(See, e.g., D.I. 210, 212, 214,
`215, 222-24, 228, 232, 233, 243, 245, 246) The Court heard oral argument on the motions, using
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`videoconference technology, on July 13, 2021. (See D.I. 244) (“Tr.”)
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`IL.
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`LEGAL STANDARDS
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`A.
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`Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(1)
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`Federal Rule of Civil Procedure 12(b)(1) permits the dismissal of an action for “lack of
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`subject matter jurisdiction.” A Rule 12(b)(1) motion may presenteither a facial or factual
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`challenge to the Court’s subject matter jurisdiction. See Davis v. Wells Fargo, 824 F.3d 333, 346
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`(3d Cir. 2016). A facial attack contests the sufficiency of the pleadings, whereas a factual attack
`contests the sufficiency ofjurisdictional facts. See Lincoln Ben. Life Co. v. AEILife, LLC, 800
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`F.3d 99, 105 (3d Cir. 2015). When considering a facial attack, the Court accepts the plaintiff's
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`well-pleaded factual allegations as true and drawsall reasonable inferences from those
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`allegations in the plaintiff's favor. See In re Horizon Healthcare Servs. Inc. Data Breach Litig.,
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`846 F.3d 625, 633 (3d Cir. 2017). When reviewing a factual attack, the Court may weigh and
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`consider evidence outside the pleadings. See Gould Elecs. Inc. v. United States, 220 F.3d 169,
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`176 (3d Cir. 2000).
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`B.
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`Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)
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`Evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) requires
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`the Court to accept as true all material allegations of the complaint. See Spruill v. Gillis, 372
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`F.3d 218, 223 (3d Cir. 2004). “The issue is not whethera plaintiff will ultimately prevail but
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`whetherthe claimantis entitled to offer evidence to support the claims.” In re Burlington Coat
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`Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997) (internal quotation marks omitted).
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`

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`Thus, the Court may grant such a motion to dismiss only if, after “accepting all well-pleaded
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`allegations in the complaint as true, and viewing them in the light most favorable to plaintiff,
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`plaintiff is not entitled to relief.” Maio v. Aetna, Inc., 221 F.3d 472, 481-82 (3d Cir. 2000)
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`(internal quotation marks omitted).
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`However, “(t]o survive a motion to dismiss, a civil plaintiffmust allege facts that ‘raise a
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`right to relief above the speculative level on the assumption that the allegations in the complaint
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`are true (even if doubtful in fact).’” Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir. 2007)
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`(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A claim is facially plausible
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`“when the plaintiff pleads factual content that allows the court to draw the reasonable inference
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`that the defendantis liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
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`(2009). At bottom,“[t]he complaint must state enough facts to raise a reasonable expectation
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`that discovery will reveal evidence of [each] necessary element”of a plaintiffs claim.
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`Wilkerson v. New Media Tech, Charter Sch. Inc., 522 F.3d 315, 321 Gd Cir. 2008) (internal
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`quotation marks omitted).
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`The Court is not obligated to accept as true “bald assertions,” Morse v. Lower Merion
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`Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (internal quotation marks omitted), “unsupported
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`conclusions and unwarranted inferences,” Schuylkill Energy Res., Inc. v. Pa. Power & Light Co.,
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`113 F.3d 405, 417 (Gd Cir. 1997), or allegations that are “self-evidently false,” Nami v. Fauver,
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`82 F.3d 63, 69 (Gd Cir. 1996).
`
`10
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`Case 1:19-cv-01461-LPS Document127 Filed 03/11/22 Page 13 of 50 PagelD #: 3516
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`TI.
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`DESCUSSION
`
`A.
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`Plaintiffs’ Federal Antitrust Claims
`
`1,
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`Reverse Payment UnderSection 1 of the Sherman Act
`(DPPs’ Count IV and EPPs’ Second Claim for Relief)
`
`In the amended complaints, Plaintiffs allege that, under the Amgen-Teva Agreement,
`
`Amgen provided a “large and unjustified payment” to Teva in exchange for delay of generic
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`entry into the cinacalcet market. (D.I. 195 $312; D.I. 202 § 285) According to Plaintiffs, the
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`“darge and unjustified” reverse payment included:
`
`(1) Teva’s retained revenue from its generic product launch,
`
`(2) an agreed entry date that provides Teva with exclusive market
`entry before other generic entrants, and
`
`(3) an acceleration provision, assuring Teva an ability to resume
`sales of its generic product if another generic launched before
`Teva’s entry date.
`
`(D.I. 195 § 312; D.I. 202 § 285) Plaintiffs allege that the reverse payment scheme underthe
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`Amgen-Teva Agreement “substantially, unreasonably, and unduly restrained trade in the
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`[cinacalcet] market.” (D.I. 195 § 313; D.I. 202 J 286) Specifically, Plaintiffs allege that the
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`Amgen-Teva Agreement had the “purpose and effect”to:
`
`eliminate existing competition between Amgen and Teva
`a.
`and to prevent Teva from competing with Amgenbyselling its
`generic version of Sensipar until mid-2021,
`
`delay entry of generic versions of Sensipar by companies
`b.
`other than Teva in order to maintain the period in which Amgen
`brand Sensipar monopolizes the relevant market; and
`
`raise and maintain the prices that Plaintiffs and the class
`c.
`would pay for Sensipar and Teva’s generic Sensipar to and at
`supra-competitive levels.
`
`(D.1. 195 9313; D.L. 202 § 286)
`
`11
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`
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`

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`Case 1:19-cv-01461-LPS Document 127 Filed 03/11/22 Page 14 of 50 PagelD #: 3517
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`The Court already considered the plausibility of Plaintiffs’ reverse payment claim in
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`comnection with Defendants’ motions (D.I. 27, 31) to dismiss Plaintiffs’ original complaints (D.I.
`
`12, 13). The Court concluded then that “a portion of Plaintiff's Section 1 claims survive the
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`motions to dismiss, specifically the theories embodied in statements a and c above(but notb).”
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`(D.I. 177 at 6) In the amended complaints, Plaintiffs have re-pledall the key facts supporting the
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`reverse payment claim.
`
`(See, e.g., D.I. 222 at 32-33) The Court finds no persuasive reason to
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`depart from its previous conclusion."”
`
`In support oftheir motions now directed at the amended complaints, and notwithstanding
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`the Court’s earlier analysis, Defendants contend that the payments Teva received from Amgen
`
`do not qualify as “large and unjustified,” as required to state a reverse payments claim under
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`Fed. Trade Comm’n v. Actavis, Inc., 570 U.S. 136 (2013). (See D.I. 212 at 8) Defendants first
`
`argue that the Amgen-Teva Agreement “function{ed] like the early entry compromise explicitly
`
`blessed by Actavis” becauseit allowed Tevato sell its generic drug productpriorto the
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`expiration of the ’405 patent. (See id. at 9) However, as the Court has explained:
`
`[While one might view as pro-competitive Amgen’s agreement
`that Teva could enter the market five years before Amgen’s patent
`would otherwise exclude Teva, one mightalternatively view
`Amgen’s inducementof Teva to leave the market after just a week
`of sales ... approximately 2 4 years before the agreed-upon re-
`entry date (June 2021), as anti-competitive.
`
`10 Also consistent with its previous decision, the Court finds that the reverse payment included
`(1) the release of Amgen’s infringement claim for damages against Teva, thus allowing Teva to
`retain most of the revenues from its at-risk sales, and (2) the acceleration clause provided to Teva
`in the Amgen-Teva Agreement. Plaintiffs’ allegation that the payment included “an agreed entry
`date that provides Teva with exclusive market entry before other generic entrants” is implausible,
`as the operative complaints allege that at least seven other generic manufacturers obtained the
`same entry date as Teva, leaving Teva with no “exclusive market entry.” (See D.I. 195 {fj 139-
`46; D.I. 202 9] 135-42)
`
`12
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`

`

`
`
`
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`Case 1:19-cv-01461-LPS Document 127 Filed 03/11/22 Page 15 of 50 PagelD #: 3518
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`(D.I. 177 at 13-14) Determining which of these competing inferences is correct (and supported
`
`by a preponderanceofthe evidence) is not possible at this stage of the case. Accordingly, the
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`Court cannot conclude at this stage that the Amgen-Teva Agreementis consistent with those
`
`agreements “blessed by Actavis.”
`
`Defendants also take issue with Plaintiffs’ allegations regarding the weakness of
`
`Amgen’s patent infringementclaims, contending that these allegations “flatly contradict any
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`theory that Amgen’s release was disproportionately valuable compared to the up-to-$40 million
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`that Teva agreed to payfor it.” (D.I. 212 at 9-10) Defendants specifically pointto the allegation
`
`that Amgen had no “reasonable expectation of prevailing on its patent merits” (D.I. 195 4201;
`
`D.L202 186; see also D.I. 212 at 9-10; Ty. at 10-11), arguing that Plaintiffs effectively
`
`“abandoned”the reverse payment theory, as “[u]nderthe facts pled, Amgen’s release was
`
`worthless, and no meaningful consideration flowed from Amgen to Teva from the granting of
`
`that release.” (D.I. 232 at 9n.11) Defendants’ argument is based on the common-sense notion
`
`that if Plaintiffs are correct that Amgen’s patent claims were weak, then when Amgenreleased
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`Teva from liability on those patent claims, Amgen was giving close to nothing of value to Teva.
`
`The Court, however, is not persuaded that Plaintiffs have effectively pled themselves out of a
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`reverse payments claim.
`
`Asan initial matter, Amgen’s purported assessment of the merits of its patent
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`infringementclaimsis not necessarily indicative of the valueofits release as perceived by Teva.
`
`Atthis early stage, in connection with a motion to dismiss and without any evidence, it would be
`
`improperto infer from the allegation that Amgen had no “reasonable expectation of prevailing
`
`on its patent merits” that Teva also believed Amgen had no real case against Teva. It would be
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`13
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`Case 1:19-cv-01461-LPS Document127 Filed 03/11/22 Page 16 of 50 PagelD #: 3519
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`improper, then, to draw the inference — against Plaintiffs — that “Amgen’s release was
`
`worthless.”
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`Moreover, a motion to dismiss in an antitrust case does not present an opportunity for the
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`Court to accurately assess the strength of a party’s patent claims. Without evidence in the
`
`record, the Court is not in a position to determine the value of Amgen’s patent infringement
`
`claimsrelative to, among other things,(i) the value of Teva’s retained revenue,(ii) the value of
`
`
`
`the payment made by Teva to Amgen,or(iii) the litigation costs each party saved by settling.
`
`Thus, the impact of the purported weakness of Amgen’s infringementclaims against Teva on
`
`Amgen’s release of those claimsis not a question the Court is in a position to resolveat this
`
`point.'!
`
`This conclusion is consistent with the Third Circuit’s guidancethat a plaintiff can satisfy
`
`the pleading standard for a reverse payments claim “without describing in perfect detail the
`world without the reverse payment, calculating reliably the payment’s exact size, or preempting
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`every possible explanation forit.” Fed. Trade Comm’n v. AbbVie Inc., 976 F.3d 327, 356 (3d
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`Cir. 2020). Even assuming Defendants are correct that the value of Amgen’s release depends, to
`
`some extent, on the strength of Amgen’s infringement claims (see D.I. 212 at 9), Plaintiffs are
`
`not required, at the pleading stage, to account for the precise impact of the weakness of Amgen’s
`
`infringement claims on the value of the release. In addition, “even if there is an explanation for a
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`reverse payment, that possibility [does] not justify dismissing the antitrust plaintiff's
`
`1! Defendants’ reliance on Jn re Lipitor Antitrust Litig., 868 F.3d 231 (3d Cir. 2017), is
`misplaced. (See D.I. 212 at 9) In Lipitor, the release of an infringement claim that had a “high
`likelihood of success” was found to support the allegation of a reverse payment. See 868 F.3d at
`253. Lipitor did not, however, hold that the release of an infringement claim that was
`purportedly “weak” could notalso constitute a reverse payment (particularly in combination with
`other value given from the patentee to the alleged infringer).
`
`14
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`

`

`Case 1:19-cv-01461-LPS Document127 Filed 03/11/22 Page 17 of 50 PagelD #: 3520
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`complaint.” In re Lipitor Antitrust Litig., 868 F.3d 231, 257 (3d Cir. 2017) (internal quotation
`
`marks omitted). Instead, Defendants will have an opportunity, as this case proceeds, to attempt
`
`to show that “legitimate justifications are present, thereby explaining the presence ofthe
`
`challenged term and showing the lawfulness of that term underthe rule of reason.” Actavis, 570
`
`USS. at 156.
`
`Plaintiffs have plausibly stated a Section 1 claim under the reverse payment theory. Teva
`
`generated revenues of $393 million and made over $200 million in profits from its at-risk sales,
`
`(See D.I. 195 Jf] 184, 187; D.I. 202 44{ 170, 171) The Amgen-Teva Agreement only required that
`
`Teva pay Amgen no more than $40 million in damages, thus allowing Tevato retain nearly 90%
`
`of its revenues and nearly 80% ofits profits. (See D.I. 195 4 190; D.L. 202 4 180-82, 193)
`
`Teva’s r