CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 1 of 49
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MINNESOTA
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`
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`BCBSM, Inc., Health Care Service
`Corporation, Molina Healthcare, Inc., and
`Blue Cross and Blue Shield of Florida, Inc.,
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`
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`v.
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`Celgene Corporation and Bristol-Myers
`Squibb Company,
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`
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`
`Case No. 0:20-cv-02071-SRN-ECW
`
`HON. SUSAN RICHARD NELSON
`HON. ELIZABETH COWAN WRIGHT
`
`
`
`Plaintiffs,
`
`Defendants.
`
`
`
`MEMORANDUM OF LAW IN SUPPORT OF
`DEFENDANTS’ MOTION TO DISMISS PURSUANT TO RULE 12(b)(6)
`
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 2 of 49
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`TABLE OF CONTENTS
`
`TABLE OF AUTHORITIES .............................................................................................. iv
`
`INTRODUCTION ............................................................................................................... 1
`
`BACKGROUND ................................................................................................................. 2
`
`LEGAL STANDARDS ....................................................................................................... 6
`
`ARGUMENT ....................................................................................................................... 7
`
`I.
`
`PLAINTIFFS’ ANTITRUST THEORIES FAIL ..................................................... 9
`
`A.
`
`The Antitrust Theories in Counts I-IV Are Contrary To Law. ..................... 9
`
`1.
`
`2.
`
`3.
`
`4.
`
`Refusals to Deal. ................................................................................ 9
`
`Sham Litigation. ............................................................................... 11
`
`a.
`
`Litigations on the Thalomid Patents. .................................... 12
`
`1)
`
`2)
`
`Lannett Litigation. ...................................................... 12
`
`Barr Litigation. ........................................................... 14
`
`b.
`
`Litigations on the Revlimid Patents. ..................................... 15
`
`1)
`
`2)
`
`Natco Litigation. ........................................................ 17
`
`Other patent infringement suits. ................................. 17
`
`c.
`
`The Distribution Method Patents. ......................................... 18
`
`Patent Settlements ............................................................................ 19
`
`Plaintiffs Lack Any Antitrust Injury ................................................ 21
`
`a.
`
`b.
`
`Plaintiffs Fail to Adequately Plead That All of Celgene’s
`Patent Claims are Shams ....................................................... 22
`
`Plaintiffs Fail to Plead that Any Generic Has Obtained FDA
`Approval ................................................................................ 22
`
`B.
`
`Plaintiffs’ Antitrust Claims Fail Under Several Applicable State Laws. .... 23
`
`1.
`
`Plaintiffs Cannot Proceed under Certain States’ Antitrust Laws as
`Indirect Purchasers (Counts I & II). ................................................. 23
`
`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 3 of 49
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`2.
`
`3.
`
`4.
`
`5.
`
`Plaintiffs Fail to Allege Specific Impacts on Intrastate Commerce
`(Counts I, II & III). ........................................................................... 24
`
`Counts III and IV Fail To Satisfy Rule 8. ........................................ 25
`
`Plaintiffs’ Consumer Protection Claims (Count III) Do Not Satisfy
`Additional Requirements in Thirteen Jurisdictions. ........................ 26
`
`Plaintiffs’ Unjust Enrichment Claim (Count IV) Fails On Several
`Additional Bases. ............................................................................. 28
`
`a.
`
`b.
`
`c.
`
`Statutory Remedies Preclude Unjust Enrichment Claims. ... 28
`
`Unjust Enrichment Claims Cannot Be Used to Circumvent
`the Direct Purchaser Rule...................................................... 29
`
`Several States Require Allegations of a Direct Benefit to
`Sustain an Unjust Enrichment Claim. ................................... 29
`
`C.
`
`Plaintiffs’ Refusal to Deal Claims Are Untimely........................................ 30
`
`1.
`
`2.
`
`3.
`
`The Limitations Periods. .................................................................. 30
`
`The Alleged Refusal to Deal Conduct Is Many Years Old. ............. 30
`
`Consumer Protection and Unjust Enrichment Claims Related to
`Alleged Refusals to Deal are Similarly Untimely. ........................... 31
`
`II.
`
`HCSC’S OFF-LABEL CLAIMS FAIL ................................................................. 32
`
`A.
`
`Background ................................................................................................. 32
`
`1.
`
`2.
`
`Off-Label Prescriptions. ................................................................... 32
`
`Off-Label Use of Thalomid and Revlimid. ...................................... 33
`
`B.
`
`C.
`
`HCSC’s Off-Label Theory. ......................................................................... 33
`
`HCSC States No Claim. .............................................................................. 34
`
`1.
`
`HCSC Has Not Adequately Alleged Fraud (Count V). ................... 34
`
`a.
`
`b.
`
`HCSC’s Fraud Allegations Fail Under Rule 9(b). ................ 35
`
`HCSC Has Not Adequately Alleged Reliance. ..................... 36
`
`2.
`
`3.
`
`HCSC Has Not Adequately Alleged Negligent Misrepresentation. 37
`
`HCSC Has Not Adequately Alleged Unjust Enrichment. ................ 38
`
`ii
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 4 of 49
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`CONCLUSION ................................................................................................................. 39
`
`
`
`iii
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 5 of 49
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Amarin Pharma, Inc. v. F.D.A., 119 F. Supp. 3d 196 (S.D.N.Y. 2015) ........................... 33
`
`Arctic Cat v. Polaris Indus., 2014 WL 5325361 (D. Minn. Oct. 20, 2014) .......... 14, 17, 18
`
`Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) ................... 9, 10
`
`AvidAir Helicopter Supply, Inc. v. Rolls-Royce Corp., 663 F.3d 966
`(8th Cir. 2011) .............................................................................................................. 19
`
`Bank of Montreal v. Avalon Capital Grp., 743 F. Supp. 2d 1021
`(D. Minn. 2010) ..................................................................................................... 35, 36
`
`Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341 (2001) ....................................... 32
`
`C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340 (Fed. Cir. 1998) ..................................... 13
`
`City Ctr. Realty Partners, LLC v. Macy’s Retail Holdings, Inc.,
`2017 WL 4081896 (D. Minn. Sept. 13, 2017) ............................................................. 28
`
`Coalition for Affordable Drugs VI LLC v. Celgene Corp., 2015 WL 7304675
`(P.T.A.B. Nov. 16, 2015) ............................................................................................. 16
`
`Evangelical Lutheran Church in Am. Bd. of Pensions v. Spherion Pac.
`Workforce LLC, 2005 WL 1041487 (D. Minn. May 4, 2005) ..................................... 27
`
`Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009) ........................ 14
`
`F.T.C. v. Actavis, Inc., 570 U.S. 136 (2013) ..................................................................... 21
`
`GEICO Corp. v. Autoliv, Inc., 345 F. Supp. 3d 799 (E.D. Mich. 2018) ........................... 32
`
`Genz-Ryan Plumbing & Heating Co. v. Weyerhaeuser NR Co.,
`352 F. Supp. 3d 901 (D. Minn. 2018) .......................................................................... 39
`
`Graphic Communications Local 1B Health & Welfare Fund A v. CVS
`Caremark Corp., 850 N.W.2d 682 (Minn. 2014) ........................................................ 27
`
`H-Quotient, Inc. v. Knight Trading Grp., Inc., 2005 WL 323750
`(S.D.N.Y. Feb. 9, 2005) ............................................................................................... 24
`
`Huff v. Pinstripes, Inc., 972 F. Supp. 2d 1065 (D. Minn. 2013) ....................................... 28
`
`Hunt v. U.S. Tobacco Co., 538 F.3d 217 (3d Cir. 2008) ................................................... 27
`
`iv
`
`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 6 of 49
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`Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977)................................................... 7, 23, 26
`
`In re Aggrenox Antitrust Litig., 94 F. Supp. 3d 224 (D. Conn. 2015)......................... 25, 26
`
`In re Asacol Antitrust Litig., 907 F.3d 42 (1st Cir. 2018) ................................................... 7
`
`In re Canadian Imp. Antitrust Litig., 470 F.3d 785 (8th Cir. 2006) .................. 6, 21, 22, 23
`
`In re Digi Int’l, Inc. Secs. Litig., 6 F. Supp. 2d 1089 (D. Minn. 1998) ....................... 36, 38
`
`In re Effexor Antitrust Litig., 357 F. Supp. 3d 363 (D.N.J. 2018) ............................... 23, 24
`
`In re Humira Antitrust Litig., 465 F. Supp. 3d 811 (N.D. Ill. 2020) .......................... passim
`
`In re Insulin Pricing Litig., 2020 WL 831552 (D.N.J. Feb. 20, 2020) ....................... 26, 27
`
`In re K-Dur Antitrust Litig., 2008 WL 2660780 (D.N.J. Feb. 28, 2008) .......................... 29
`
`In re Magnesium Oxide Antitrust Litig., 2011 WL 5008090
`(D.N.J. Oct. 20, 2011) .................................................................................................. 25
`
`In re Nexium Antitrust Litig., 842 F.3d 34 (1st Cir. 2016) ................................................ 21
`
`In re Novartis & Par Antitrust Litig., 2019 WL 3841711
`(S.D.N.Y. Aug. 15, 2019) ................................................................................ 27, 28, 29
`
`In re Opana ER Antitrust Litig., 162 F. Supp. 3d 704 (N.D. Ill. 2016)............................. 25
`
`In re Packaged Seafood Prod. Antitrust Litig., 242 F. Supp. 3d 1033
`(S.D. Cal. 2017) ........................................................................................................... 29
`
`In re Restasis Antitrust Litig., 355 F. Supp. 3d 145 (E.D.N.Y. 2018) ........................ 27, 28
`
`In re Wellbutrin XL Antitrust Litig., 260 F.R.D. 143 (E.D. Pa. 2009) .............................. 23
`
`In re Wellbutrin XL Antitrust Litig., 868 F.3d 132 (3d Cir. 2017) .................. 11, 19, 21, 22
`
`Insulate SB, Inc. v. Advanced Finishing Sys., Inc., 797 F.3d 538
`(8th Cir. 2015) ................................................................................................................ 7
`
`Maine State Ret. Sys. v. Countrywide Fin. Corp., 722 F. Supp. 2d 1157
`(C.D. Cal. 2010) ........................................................................................................... 31
`
`Merck & Co. v. Lyon, 941 F. Supp. 1443 (M.D.N.C. 1996) ............................................. 25
`
`Merry v. Prestige Cap. Mkts., Ltd., 944 F. Supp. 2d 702 (D. Minn. 2013) ...................... 35
`
`v
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`

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`Midwest Commc’ns v. Minnesota Twins, Inc., 779 F.2d 444 (8th Cir. 1985) ................... 21
`
`Mississippi v. Yazaki N. Am., Inc., 294 So.3d 1178 (Miss. 2020) ..................................... 24
`
`Novell, Inc. v. Microsoft Corp., 731 F.3d 1064 (10th Cir. 2013) ...................................... 10
`
`Olstad v. Microsoft Corp., 700 N.W.2d 139 (Wis. 2005) ................................................. 25
`
`Park Irmat Drug Corp. v. Express Scripts Holding Co., 911 F.3d 505
`(8th Cir. 2018) .......................................................................................................... 9, 10
`
`Physician Specialty Pharmacy, LLC v. Prime Therapeutics, LLC,
`2019 WL 5149866 (D. Minn. Aug. 8, 2019), adopted 2019 WL 4463442
`(D. Minn. Sept. 18, 2019) ............................................................................................... 10
`
`Pictometry Int’l Corp. v. Geospan Corp., 2014 WL 1608263
`(D. Minn. Apr. 21, 2014) ............................................................................................. 11
`
`Razorback Ready Mix Concrete Co. v. Weaver, 761 F.2d 484 (8th Cir. 1985) .......... 11, 16
`
`Safeco Ins. Co. of Am. v. Dain Bosworth Inc., 531 N.W.2d 867
`(Minn. Ct. App. 1995) .................................................................................................. 38
`
`Schaaf v. Residential Funding Corp., 2006 WL 2506974
`(D. Minn. Aug. 29, 2006)....................................................................................... 36, 37
`
`Sergeants Benevolent Ass’n Health & Welfare Fund v. Actavis,
`2018 WL 7197233, (S.D.N.Y. Dec. 26, 2018) ................................................ 23, 26, 27
`
`Sherman v. Ben & Jerry’s Franch., Inc., 2009 WL 2462539
`(D. Vt. Aug. 10, 2009) ................................................................................................. 25
`
`Spinner Consulting LLC v. Stone Point Capital LLC, 2020 WL 5859901
`(D. Conn. Sept. 30, 2020) ............................................................................................ 24
`
`Staley v. Gilead Scis., Inc., 446 F. Supp. 3d 578 (N.D. Cal. 2020) ................................... 24
`
`State by Humphrey v. Alpine Air Prod., Inc., 490 N.W.2d 888
`(Minn. Ct. App. 1992) .................................................................................................... 7
`
`Therasense v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) ........................ 14
`
`Trooien v. Mansour, 2007 WL 436068 (D. Minn. Feb. 7, 2007) ...................................... 36
`
`Trooien v. Mansour, 608 F.3d 1020 (8th Cir. 2010) ......................................................... 37
`
`vi
`
`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 8 of 49
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`U.S. ex rel. Joshi v. St. Luke’s Hosp., Inc., 441 F.3d 552 (8th Cir. 2006) ........................ 35
`
`United States v. Celgene Corp., 226 F. Supp. 3d 1032 (C.D. Cal. 2016) ......................... 34
`
`Ventura v. Kyle, 825 F.3d 876 (8th Cir. 2016) .................................................................. 38
`
`Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398
`(2004) ............................................................................................................................. 9
`
`Vikse v. Flaby, 316 N.W.2d 276 (Minn. 1982) ................................................................. 36
`
`Williams v. Smith, 820 N.W.2d 807 (Minn. 2012) ............................................................ 38
`
`OTHER AUTHORITIES
`
`21 C.F.R. § 312.7 ............................................................................................................... 32
`
`40 Fed. Reg. 15,392, 15,394 (Apr. 7, 1975) ...................................................................... 32
`
`21 U.S.C. § 355 ................................................................................................................... 5
`
`35 U.S.C. § 271(e)(2)(A) ................................................................................................... 11
`
`65 Fed. Reg. 14,286 (Mar. 16, 2000) ................................................................................ 32
`
`
`
`vii
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 9 of 49
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`INTRODUCTION
`
`Plaintiffs are four insurance companies who bring suit for alleged damages arising
`
`from reimbursements for two cancer medicines sold by Celgene Corporation, seeking to
`
`recover payments allegedly made by their affiliate health insurers. If the Court
`
`determines in the adjacent briefing that it has personal jurisdiction and, moreover, denies
`
`venue transfer to the District of New Jersey, Plaintiffs’ claims should be dismissed for
`
`failure to state a claim.
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`Plaintiffs’ antitrust allegations are recycled from pleadings in other courts dating
`
`back to 2007. Even were they timely, the Complaint does not come close to meeting the
`
`pleading burdens for monopolization claims. For example, at the heart of the Complaint
`
`are allegations that antitrust law required Celgene to sell samples of its products to
`
`potential competitors; the governing law is clear that competitors have no “duty to deal”
`
`with one another absent a prior course of dealing. Plaintiffs ignore clear legal obstacles
`
`such as these, but they compel dismissal of Plaintiffs’ antitrust claims.
`
`One plaintiff also has also tacked on so-called “off-label marketing” claims, also
`
`based on recycled, decade-old allegations; these claims fail, too.
`
`The Complaint should be dismissed.
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`1
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 10 of 49
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`BACKGROUND
`
`Celgene’s1 Thalomid® contains the active ingredient thalidomide, the tragic
`
`history of which is well known. Developed by a German company, it was marketed
`
`internationally to pregnant women in the late 1950s as a treatment for morning sickness.
`
`Unbeknownst at the time, thalidomide is a teratogen that led to the birth—and in many
`
`cases, premature death—of a generation of children suffering from severe deformities,
`
`including abnormally short limbs and flipper-like arms (known as phocomelia). Compl.
`
`¶¶1, 93. Fortunately, thalidomide was not at that time approved in the United States, and
`
`was eventually banned elsewhere for decades. Id. ¶94. Celgene was not involved in any
`
`way in the manufacture of thalidomide during this tragic period.
`
`In the 1990s, Celgene sought to develop thalidomide as a treatment for certain rare
`
`and serious diseases, most prominently the blood cancer multiple myeloma, where it has
`
`had its greatest impact. After years of research, and also after developing a risk
`
`management program to avoid its use during pregnancy, Celgene obtained initial
`
`approval from the Food & Drug Administration (“FDA”) to market thalidomide in 1998
`
`for certain side effects associated with leprosy. Id. ¶94. Celgene continued to study
`
`thalidomide for other diseases and ultimately obtained FDA approval to market
`
`thalidomide for multiple myeloma in 2006. Id. ¶94 n.45.
`
`
`1 Defendant Bristol-Myers Squibb acquired Celgene in 2019. Compl. ¶27. Plaintiffs
`allege no conduct by Bristol-Myers Squibb.
`
`2
`
`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 11 of 49
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`Meanwhile, Celgene had begun working on safer, more effective medicines,
`
`including a new chemical compound, lenalidomide, that Celgene scientists invented and
`
`later marketed as Revlimid®, and which the FDA approved in 2005. Id. ¶97. These
`
`medicines have been immensely successful in prolonging the lives of patients with blood
`
`borne cancers. Id. ¶¶2-3.
`
`Given thalidomide’s tragic history, the FDA conditioned Celgene’s approvals to
`
`market Thalomid and subsequently Revlimid on implementation of so-called Risk
`
`Evaluation and Mitigation Strategies (“REMS”). Id. ¶¶94-95, 98. Celgene’s REMS
`
`mitigate the risk of fetal exposure by, among other things, limiting access only to
`
`physicians, pharmacists, and patients who have been educated on the products’ unique
`
`risks and who agree to ensure safety measures for patients, including pregnancy tests and
`
`contraceptive measures before and throughout use. Id. ¶¶94-95, 98, 103. It is due to
`
`these FDA-mandated programs—under which not a single child is known to have been
`
`born with Thalomid or Revlimid-related birth defects in the United States—that generic
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`manufacturers seeking “samples” of these medicines cannot simply buy them from just
`
`any distributor.
`
`Intellectual Property. Given that thalidomide is not itself a Celgene invention,
`
`Celgene did not patent the compound; it holds patents on, among other things, the method
`
`of using thalidomide to treat blood-borne cancers, as well as its particular formulation.
`
`The last of these Thalomid patents expires in 2023. Id. ¶101 (Patent No. 7,230,012).
`
`Celgene did invent the chemical compound lenalidomide, the active
`
`pharmaceutical ingredient in Revlimid, for which it was awarded a patent that did not
`
`3
`
`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 12 of 49
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`expire until October 2019. Id. (Patent No. 5,635,517). Celgene was also awarded several
`
`additional patents on Revlimid, including on methods of treating certain blood-borne
`
`cancers and on crystalline forms of lenalidomide, the last of which do not expire until
`
`2028. Id. ¶¶101, 249.
`
`“Refusal to deal.” Plaintiffs’ principal claim is that Celgene refused to sell
`
`samples of its products to generics seeking to use the samples in clinical trials, and that
`
`Celgene did so on the basis of “pretextual” concerns about safety risks. Id. ¶¶147, 223,
`
`335. Plaintiffs allege that without access to such samples, generics were unable to
`
`conduct trials to prove their copies “bioequivalent” to Celgene’s products. Id. ¶¶43-44,
`
`446. Plaintiffs claim that but for Celgene’s conduct, there would have been generic
`
`competition to Thalomid starting in 2009, and to Revlimid in 2010. Id. ¶¶443-44.
`
`Plaintiffs have been on notice of these claims for over a decade. Their allegations
`
`derive from public pleadings dating (at least) back to a 2008 lawsuit filed against Celgene
`
`by Lannett Company for refusal to sell samples (id. ¶¶192, 195)2, and a 2009 petition to
`
`the FDA publicly filed by Dr. Reddy’s Laboratories making the same allegations (id.
`
`¶204). Likewise, in 2010, Celgene publicly disclosed a Federal Trade Commission
`
`inquiry regarding “requests by generic companies to purchase [Celgene’s products]” and
`
`allegations of “unfair methods of competition.” Greenblum Decl., Ex. 1 at 28; see also
`
`Ex. 2 at 28. (The FTC later closed this publicized investigation of Celgene, without
`
`further action.)
`
`
`2 Lannett Co. v. Celgene Corp., No. 08-3920, Dkt. 1 (E.D. Pa. Aug. 15, 2008).
`
`4
`
`

`

`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 13 of 49
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`Claims of “sham litigation” and “anticompetitive settlements.” Plaintiffs allege
`
`that nearly every patent infringement suit ever filed by Celgene against generics on
`
`Thalomid and Revlimid, from 2007 through the present, constituted “sham litigation”
`
`based on “fraudulent” patents. Id. ¶¶247-447. No generic has prevailed in such
`
`litigation; instead, at best, they have negotiated settlements with licenses to practice
`
`Celgene’s patents years in the future. Infra, Part I.A.2-3.
`
`Plaintiffs vaguely suggest that some of these settlements—all of which were
`
`required, as with any such settlement, to be contemporaneously submitted to the
`
`Department of Justice and Federal Trade Commission, see 21 U.S.C. § 355, Statutory
`
`Notes, § 1112—“may” have contained anticompetitive terms. E.g., Compl. ¶¶198, 338,
`
`348, 351.
`
`Of the two Thalomid generics the Complaint identifies, one of them, Barr
`
`Laboratories, voluntarily withdrew its Abbreviated New Drug Application (“ANDA”)
`
`and never came to market, Compl. ¶347; the other, Lannett, reached a settlement with a
`
`license to Celgene’s patents beginning in August 2019. Compl. ¶356.
`
`As for Revlimid, none of the generics have succeeded in defeating Celgene’s
`
`patents. By filing ANDAs, all of them necessarily infringed Celgene’s patent on the
`
`compound in Revlimid that Celgene invented—which did not expire until October
`
`2019—along with other patents not expiring until 2028.
`
`The only substantive Revlimid litigation outcomes the Complaint describes are a
`
`2015 settlement with Natco and a 2019 settlement with Alvogen, Inc. and Lotus
`
`Pharmaceutical. Natco received a license to begin selling only a limited quantity of a
`
`5
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`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 14 of 49
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`generic Revlimid product in 2022, with a full license for unlimited quantities beginning
`
`in 2026. Id. ¶370-71. Likewise, Alvogen and Lotus are not licensed to market even a
`
`limited volume of their generic product until after Natco’s entry. Id. ¶414 & n.108.
`
`The Complaint does not allege that any of the hypothetical generic products that
`
`Celgene allegedly delayed to market ever received the approval of the FDA. No drug
`
`product can be sold in the United States without such approval. See In re Canadian Imp.
`
`Antitrust Litig., 470 F.3d 785, 789 (8th Cir. 2006).
`
`Plaintiffs Are Insurers Who Allegedly Overpaid in Reimbursing for Thalomid
`
`and Revlimid. Plaintiffs are Blue Cross and Blue Shield of Florida, Blue Cross and Blue
`
`Shield of Minnesota, Molina Healthcare, Inc., and Health Care Service Corporation
`
`(“HCSC”). None of them purchased anything directly from or paid anything directly to
`
`Celgene.
`
`Claims of “Off-Label Marketing.” Only HCSC separately alleges—on the basis
`
`not of antitrust but of various theories of misrepresentation—that Celgene improperly
`
`marketed Thalomid and Revlimid for “off-label” indications that the FDA has not
`
`formally approved, but that doctors are free to prescribe in their medical judgment. Id.
`
`¶¶473-83.
`
`LEGAL STANDARDS
`
`“Given the unusually high cost of discovery in antitrust cases, the limited success
`
`of judicial supervision in checking discovery abuse, and the threat that discovery expense
`
`will push cost-conscious defendants to settle even anemic cases, the federal courts have
`
`been reasonably aggressive in weeding out meritless antitrust claims at the pleading
`
`6
`
`

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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 15 of 49
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`stage.” Insulate SB, Inc. v. Advanced Finishing Sys., Inc., 797 F.3d 538, 543 (8th Cir.
`
`2015) (cleaned up).
`
`Plaintiffs seek to bring their antitrust claims under state law, because as insurance
`
`companies several steps removed from Defendants, they are not direct purchasers and so
`
`have no claim under federal antitrust law. Illinois Brick Co. v. Illinois, 431 U.S. 720, 729
`
`(1977). Plaintiffs’ Complaint lists dozens of state laws under which they seek to proceed,
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`but nowhere does it identify on what basis, and as to which reimbursements, on behalf of
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`which insureds, Plaintiffs would recover under one state law versus any other.
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`In any event, the state antitrust and competition laws strewn about the Complaint
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`go no further than federal antitrust law. See In re Asacol Antitrust Litig., 907 F.3d 42, 46
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`(1st Cir. 2018). This is no accident: “Without uniform construction between state and
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`federal antitrust laws, businesses will have a difficult time predicting the antitrust
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`implications of their business decisions.” State by Humphrey v. Alpine Air Prod., Inc.,
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`490 N.W.2d 888, 894 (Minn. Ct. App. 1992).
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`ARGUMENT
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`The Complaint’s overheated rhetoric—i.e., that Celgene engaged in a
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`“multipronged scheme” to protect its “impenetrable monopolistic fortress,” Compl. ¶4—
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`does not withstand scrutiny.
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`Plaintiffs’ antitrust claims turn on three theories: (i) that Celgene unreasonably
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`refused to sell samples of its products to generics; (ii) that Celgene filed “sham
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`litigations” in the District of New Jersey on “fraudulent” patents; and (iii) that Celgene
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`reached patent settlements that “may” have been anticompetitive.
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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 16 of 49
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`Plaintiffs’ refusal to deal theory fails because there is no allegation, nor could
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`there be, that Celgene terminated an existing course of dealing with respect to the sale of
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`samples of its products to generics. Infra, Part I.A.1. These claims are also untimely.
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`Infra, Part I.C.
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`Plaintiffs’ sham litigation theory is unsupported by allegations that Celgene’s
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`infringement suits were so frivolous as to incur antitrust liability in themselves—
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`particularly where, as here, those suits have been successful—much less Rule 9(b)-
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`sufficient facts that Celgene’s patents are all “fraudulent.” Infra, Part I.A.2.
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`Plaintiffs’ theory that patent settlements “may” have been anticompetitive does not
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`even get out of the starting gate. Allegations that parties have entered into an antitrust
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`conspiracy require pleading of specific indicia that the parties agreed to particular
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`anticompetitive terms. Whatever Plaintiffs have in mind, “maybe” does not cut it. Infra,
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`Part I.A.3.
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`Further, even had Plaintiffs adequately pled any of these theories, they have failed
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`to plausibly allege any antitrust injury, because both patents (infra, Part I.A.4.a) and lack
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`of FDA approval (infra, Part I.A.4.b) stood in the way of lawful sales of the generic
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`products at issue.
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`These deficiencies are fatal to Plaintiffs’ antitrust claims no matter how they style
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`them. But there are additional reasons why such claims fail under the various state laws
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`that Plaintiffs seek to rely upon. Infra, Part I.B.
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`One plaintiff, HCSC, brings claims outside of antitrust law, for alleged “off-label
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`marketing” of Celgene’s products. But the alleged misrepresentations are not alleged
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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 17 of 49
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`with the required particularity, nor does HCSC allege that it even received them—much
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`less relied upon them. Nor does (or could) HCSC allege a relationship with Celgene that
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`could give rise to a duty of care or support equitable relief. Infra, Part II.
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`I.
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`PLAINTIFFS’ ANTITRUST THEORIES FAIL
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`A.
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`The Antitrust Theories in Counts I-IV Are Contrary To Law.
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`1.
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`Refusals to Deal.
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` “Generally, Section 2 of the Sherman Act does not restrict the right ‘of a trader or
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`manufacturer engaged in an entirely private business, freely to exercise his own
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`independent discretion as to parties with whom he will deal.’” Park Irmat Drug Corp. v.
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`Express Scripts Holding Co., 911 F.3d 505, 518 (8th Cir. 2018) (quoting Verizon
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`Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004)). So
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`before courts in this Circuit will even consider deviating from this rule, a plaintiff must
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`first plead a prior course of dealing between the defendant and the competitor at issue.
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`Id.
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`The prior-course-of-dealing requirement traces its origins to Aspen Skiing Co. v.
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`Aspen Highlands Skiing Corp., 472 U.S. 585 (1985). There, the Court found a ski-slope
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`owner violated Section 2 by repudiating a years-old cooperative venture with its
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`competitor. Id. at 589-94. Central to that ruling was—as the Court later put it—the
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`defendant’s “unilateral termination of a voluntary (and thus presumably profitable)
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`course of dealing.” Trinko, 540 U.S. at 409.
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`Likewise, in Park Irmat, plaintiff sued a pharmacy-benefits manager for excluding
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`mail-order pharmacies from its network. 911 F.3d at 511, 517. The court affirmed
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`CASE 0:20-cv-02071-SRN-ECW Doc. 47 Filed 12/04/20 Page 18 of 49
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`dismissal, because the plaintiff and defendant had no “voluntary, years-long relationship
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`regarding their competing [] pharmacies”; absent such a prior course of dealing, the
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`defendant’s refusal to deal did not constitute anticompetitive conduct, because “[t]he
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`‘limited exception’ set forth in Aspen is inapplicable.” Id. at 518; see also Physician
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`Specialty Pharmacy, LLC v. Prime Therapeutics, LLC, 2019 WL 5149866, *9 (D. Minn.
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`Aug. 8, 2019) (dismissing for plaintiff’s failure to allege “any relationship, let alone a
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`long-standing one, with [defendant]”), adopted, 2019 WL 4463442 (D. Minn. Sept. 18,
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`2019).
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`The courts’ hesitance to compel one competitor to assist another is driven in part
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`by reticence “to pick and choose the applicable terms and conditions ... , a role for which
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`[] judges lack many comparative advantages[.]” Novell, Inc. v. Microsoft Corp., 731 F.3d
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`1064, 1073 (10th Cir. 2013). Plaintiffs’ own allegations highlight the reasons for such
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`concerns: Plaintiffs acknowledge thalidomide’s potential to cause “life-threatening fetal
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`deformities and birth defects” (Compl. ¶93), yet complain of Celgene’s requirements for
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`the sale of samples of these medicines, e.g., insurance requirements (id. ¶178) and FDA
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`pre-approval of the safety of the generic manufacturer’s safety protocols (id. ¶109).
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`This Court need not wade into the issues attendant to the sale of samples of such
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`drugs: the Eighth Circuit’s clear bar against any refusal to deal claim absent a prior
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`course of dealing is dispositive. Plaintiffs do not plead (nor could they) that Celgene had
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`previously been selling samples of Thalomid or Revlimid to any of the subject generics,
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`and then abruptly terminated that course of dealing.