Case 3:20-cv-03426-BRM-LHG Document 139 Filed 03/15/21 Page 1 of 94 PageID: 1468
`
`
`
`Peter S. Pearlman
`Matthew F. Gately
`COHN LIFLAND PEARLMAN
`HERRMANN & KNOPF, LLP
`Park 80 West Plaza One
`250 Pehle Avenue, Suite 401
`Saddle Brook, New Jersey 07663
`(201) 845-9600
`psp@njlawfirm.com
`mfg@njlawfirm.com
`
`Interim Liaison Counsel for Direct Purchaser Class
`
`[Additional Counsel on Signature Page]
`
`
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
`
`
`
`Case No. 3:20-cv-3426
`(BRM)(LHG)
`
`
`
`
`
`)))))))))
`
`
`
`
`
`
`
`
`IN RE: DIRECT PURCHASER
`INSULIN PRICING LITIGATION
`
`
`This Document Relates to:
`
`All Actions
`
`
`
`PLAINTIFFS’ OPPOSITION TO
`DEFENDANTS’ MOTIONS TO DISMISS
`
`
`{00217459 } 
`
`

`

`Case 3:20-cv-03426-BRM-LHG Document 139 Filed 03/15/21 Page 2 of 94 PageID: 1469
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` 
`
`TABLE OF CONTENTS
`
`TABLE OF AUTHORITIES ................................................................................................. ii 
`
`I. 
`
`II. 
`
`INTRODUCTION AND BACKGROUND .......................................................... 1 
`
`ARGUMENT ................................................................................................................ 5 
`
`A. 
`
`The FAC States a Robinson-Patman Act Claim. .......................................... 5 
`
`1. 
`
`2. 
`
`The FAC Alleges a Violation of Section 2(c) of the
`Robinson-Patman Act. .......................................................................... 5 
`
`Plaintiffs Have Standing to Recover Robinson-Patman
`Damages. ............................................................................................... 20 
`
`B. 
`
`Plaintiffs Have Pled a Plausible Sherman Act Claim. ................................ 26 
`
`1. 
`
`2. 
`
`The FAC States a Plausible Section 1 Claim Against the
`Manufacturers. ...................................................................................... 26 
`
`The FAC States a Plausible Section 1 Claim Against the
`PBMs. ..................................................................................................... 36 
`
`C. 
`
`The FAC Satisfies the RICO Pleading Standards. ...................................... 50 
`
`1. 
`
`2. 
`
`3. 
`
`FWK Has Standing to Pursue RICO Claims. .................................. 50 
`
`Plaintiffs Sufficiently Allege Predicate Acts. .................................... 50 
`
`Plaintiffs Have Pled a Direct Injury. ................................................. 53 
`
`D. 
`
`E. 
`
`The FAC Was Timely Filed. ........................................................................... 68 
`
`Lilly is Jointly and Severally Liable as a Conspirator. ................................. 77 
`
`III.  CONCLUSION........................................................................................................... 79 
`
`
`
`
`
`
`
`
`i
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` 
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`

`

`Case 3:20-cv-03426-BRM-LHG Document 139 Filed 03/15/21 Page 3 of 94 PageID: 1470
`
` 
`
`Cases 
`
`TABLE OF AUTHORITIES
`
` 
`
`Page(s) 
`
`2660 Woodley Road Joint Venture v. ITT Sheraton Corp.,
`369 F.3d 732 (3d Cir. 2004) ....................................................................................... passim
`
`In re Aetna UCR Litig.,
`2015 WL 3970168 (D.N.J. Jun. 30, 2015) ...................................................................... 64
`
`Allen v. Wright,
`468 U.S. 737 (1984) ........................................................................................................... 77
`
`In re Allergan Erisa Litig.,
`975 F.3d 348 (3d Cir. 2020) ...................................................................................... 34, 35
`
`Alston v. Parker,
`363 F.3d 229 (3d Cir. 2004) ............................................................................................. 79
`
`Anza v. Ideal Steel Supply Corp.,
`547 U.S. 451 (2006) .............................................................................................. 53, 54, 56
`
`Arthur v. Guerdon Indus.,
`827 F. Supp. 273 (D. Del. 1993) ..................................................................................... 59
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ...................................................................................................... 4, 26
`
`In re Aspartame Antitrust Litig.,
`2007 WL 5215231 (E.D. Pa. Jan. 18, 2007) ............................................................ 72, 73
`
`In re Auto. Parts Antitrust Litig.,
`2017 WL 7689654 (E.D. Mich. May 5, 2017) ............................................................... 73
`
`In re Avandia Mktg., Sales Practices & Prod. Liab. Litig.,
`804 F.3d 633 (3d Cir. 2015) ............................................................................................. 55
`
`Baar v. Jaguar Land Rover North America, LLC,
`295 F.Supp.3d 460 (D.N.J. 2018) .................................................................................... 46
`
`United States, ex rel. Bartlett v. Ashcroft,
`39 F. Supp. 3d 656 (W.D. Pa. 2014) ............................................................................... 51
`
` 
` 
`
`ii
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`

`

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`
` 
`
`Bell Atlantic Corp. v. Twombly,
`550 U.S. 544 (2007) ..................................................................................................... passim
`
`Bethlehem Steel Corp. v. Fischbach and Moore, Inc.,
`641 F. Supp. 271 (E.D. Pa. 1986) ................................................................................... 75
`
`Bible v. United Student Aid Funds, Inc.,
`799 F.3d 633 (7th Cir. 2015) ............................................................................... 62, 63, 64
`
`Big Apple BMW, Inc. v. BMW of North America, Inc.,
`974 F.2d 1358 (3d Cir. 1992) .................................................................................... 37, 43
`
`In re Blood Reagents Antitrust Litig.,
`756 F. Supp. 2d 623 (E.D. Pa. 2010) ....................................................................... 27, 33
`
`Blue Cross & Blue Shield United of Wisconsin v. Marshfield Clinic,
`881 F. Supp. 1309 (W.D. Wis. 1994) .............................................................................. 12
`
`Blue Shield of Virginia v. McCready,
`457 U.S. 465 (1982) ........................................................................................................... 26
`
`Blue Tree Hotels Investment (Canada) Ltd. v. Starwood Hotels & Resorts
`Worldwide, Inc.,
`369 F.3d 212 (2d Cir. 2004) .................................................................................. 5, 6, 7, 9
`
`Boyle v. United States,
`556 U.S. 938 (2009) ........................................................................................................... 66
`
`BRFHH Shreveport, LLC v. Willis Knighton Medical Center,
`176 F. Supp. 3d 606 (W.D. La. 2016) ............................................................................. 29
`
`Bridge v. Phoenix Bond & Indemnity Co.,
`553 U.S. 639 (2008) .............................................................................................. 55, 56, 57
`
`Brillhart v. Mut. Med. Ins. Inc.,
`768 F.2d 196 (7th Cir.1985) ............................................................................................. 12
`
`Brittingham v. Mobil Corp.,
`943 F.2d 297 (1991) ........................................................................................................... 64
`
`Burtch v. Milberg Factors, Inc.,
`662 F.3d 212 (3d Cir. 2011) ............................................................................................. 36
`
` 
` 
`
`iii
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`

`

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`
` 
`
`Business Electronics Corp. v. Sharp Electronics Corp.,
`485 U.S. 717 (1988) .................................................................................................... 40, 47
`
`Castro v. Sanofi,
`2012 WL 12516572 (D.N.J. Aug. 6, 2012) ................................................ 21, 23, 24, 25
`
`Cent. Wesleyan Coll. v. W.R. Grace & Co.,
`6 F.3d 177 (4th Cir. 1993) ................................................................................................ 77
`
`In re Chocolate Confectionary Antitrust Litig.,
`602 F. Supp. 2d 538 (M.D. Pa. 2009) ...................................................................... 28, 29
`
`In re Chocolate Confectionary Antitrust Litig.,
`801 F.3d 383 (3d Cir. 2015) ................................................................................ 27, 28, 29
`
`Chroma Lighting v. GTE Prods.,
`111 F.3d 653 (9th Cir. 1997) ............................................................................................ 22
`
`City of Pittsburgh v. West Penn Power Co.,
`147 F.3d 256 (3d Cir. 1998) ...................................................................................... 27, 43
`
`Compound Property Management, LLC v. Build Realty, Inc.,
`462 F. Supp. 3d 839 (S.D. Ohio 2020) ........................................................................... 61
`
`Cont. T.V., Inc. v. GTE Sylvania, Inc.,
`433 U.S. 36 (1977) ...................................................................................................... 46, 47
`
`Continental Mgmt. Inc. v. United States,
`527 F.2d 613 (Ct. Cl. 1975) .............................................................................................. 24
`
`Continental Ore Co. v. Union Carbide & Carbon Corp.,
`370 U.S. 690 (1962) ........................................................................................................... 37
`
`Copperweld Corp. v. Independence Tube Corp.,
`467 U.S. 752 (1984) ........................................................................................................... 37
`
`Corcel Corp. v. Ferguson Enterprises, Inc.,
`551 F. App’x 571 (11th Cir. 2014) .................................................................................. 56
`
`Crest Construction II, Inc. v. Doe et al.,
`660 F.3d 346 (8th Cir. 2011) ............................................................................................ 67
`
`Daugherty v. Adams,
`2019 WL 7987859 (W.D. Pa. Nov. 15, 2019) ............................................................... 77
`
` 
` 
`
`iv
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`
` 
`
`In re Delta/AirTran Baggage Fee Antitrust Litig.,
`733 F. Supp. 2d 1348 (N.D. Ga. 2010) .......................................................................... 33
`
`Devon Drive Lioville, LP v. Parke Bancorp, Inc.,
`791 F. App’x 301 (3d Cir. 2019) ......................................................................... 53, 54, 56
`
`District 1199P Health and Welfare Plan v. Janssen, L.P.,
`784 F. Supp. 2d 508 (D.N.J. 2011) ................................................................................. 58
`
`Drug Mart Pharmacy Corp. v. American Home Products Corp.,
`472 F. Supp. 2d 385 (E.D.N.Y. 2007) ..................................................................... 11, 12
`
`Edison Electric Institute v. Henwood,
`832 F. Supp. 413 (D.D.C. 1993) ...................................................................................... 24
`
`In re Elec. Carbon Prods. Antitrust Litig.
`333 F. Supp. 2d 303 (D.N.J. 2004) .......................................................................... 74, 75
`
`In re Elevator Antitrust Litig.,
`502 F.3d 47 (2d Cir. 2007)......................................................................................... 28, 29
`
`Emerson Elec. Co. v. Le Carbone Lorraine, S.A.,
`500 F. Supp. 2d 437 (D.N.J. 2007) ................................................................................. 72
`
`Empress Casino Joliet Corp. v. Johnston,
`763 F.3d 723 (7th Cir. 2014) ............................................................................................ 56
`
`Environmental Tectonics v. W.S. Kirkpatrick, Inc.,
`847 F.2d 1052 (3d Cir. 1988) .................................................................................. 5, 7, 22
`
`In re EpiPen Direct Purchaser Litig.,
`2021 WL 147166 (D. Minn. Jan. 15, 2021) .............................................................. passim
`
`In re EpiPen Direct Purchaser Litig.,
`Case No. 20-cv-827 (D. Minn. Jan. 15, 2021), ECF No. 87 ....................................... 53
`
`Erie Forge and Steel, Inc. v. Cyprus Minerals Co.,
`1994 WL 485803 (W.D. Pa. 1994) .................................................................................. 36
`
`In re Express Scripts, Inc. PBM Litig.,
`2008 WL 1766777 (E.D. Mo. Feb. 6, 2008) ..................................................... 13, 15, 16
`
`In re Express Scripts, Inc. PBM Litig.,
`2008 WL 2952787 (E.D. Mo. July 30, 2008) .................................................... 13, 15, 17
`
` 
` 
`
`v
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`
` 
`
`Feldman v. Health Care Serv. Corp.,
`562 F. Supp. 941 (N.D. Ill. 1982) .................................................................................... 12
`
`Foman v. Davis,
`371 U.S. 178 (1962) ........................................................................................................... 79
`
`FTC v. Abbvie,
`976 F.3d 327 (3d Cir. 2020) ............................................................................................. 11
`
`FTC v. Henry Broch & Co.,
`363 U.S. 166 (1960) ......................................................................................................... 5, 6
`
`FTC v. Simplicity Pattern Co.
`360 U.S. 55 (1959) ............................................................................................................... 7
`
`In re Glumetza,
`2020 WL 1066934 (N.D. Cal. Aug. 15, 2020) ............................................................... 73
`
`Grace v. E.J. Kozin Co.,
`538 F.2d 170 (7th Cir. 1976) ..................................................................................... 10, 23
`
`Grand Union Co. v. F.T.C.,
`300 F.2d 92 (2d Cir. 1962).................................................................................................. 7
`
`Great Atlantic and Pacific Tea Co. v. FTC,
`106 F.2d 667 (3d Cir. 1939) ............................................................................................. 10
`
`Green v. Mountain Coffee Roasters, Inc.,
`279 F.R.D 275 (D.N.J. 2011) ........................................................................................... 78
`
`Harris Cty., Texas v. Eli Lilly & Co.,
`2020 WL 5803483 (S.D. Tex. Sept. 29, 2020) ............................................................... 58
`
`Harris v. Duty Free Shoppers Ltd.,
`940 F.2d 1272 (9th Cir. 1991) ............................................................................................ 8
`
`Humphrey v. GlaxoSmithKline PLC,
`905 F.3d 694 (3d Cir. 2018) ............................................................................................. 67
`
`Ill. Farmers Ins. Co. v. Mobile Diagnostic Imaging, Inc.,
`2014 WL 4104789 (D. Minn. Mar. 12, 2018) ................................................................ 67
`
`In re Insulin Pricing Litig.,
`2019 WL 643709 (D.N. J. Feb. 15, 2019) ................................................................ passim
`
` 
` 
`
`vi
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`
` 
`
`In re Insulin Pricing Litig.,
`2020 WL 831552 (D.N.J. Feb. 20, 2020) ................................................................. passim
`
`In re Insurance Brokerage Antitrust Litig.,
`618 F.3d 300 (3d Cir. 2010) ............................................................................................. 48
`
`Jaguar Cars, Inc. v. Royal Oaks Motor Car Co., Inc.,
`46 F.3d 258 (3d Cir. 1995)................................................................................................ 64
`
`Kartell v Blue Shield of Mass., Inc.,
`749 F.2d 922 (1st Cir. 1984) ............................................................................................. 12
`
`Leegin Creative Leather Prods., Inc. v. PSKS, Inc.,
`551 U.S. 877 (2007) .................................................................................................... 44, 48
`
`In re Linerboard Antitrust Litig.,
`305 F.3d 145 (3d Cir. 2002) ............................................................................................. 68
`
`In re Luppino,
`221 B.R. 693 (Bankr. S.D.N.Y. 1998) ............................................................................. 24
`
`In re Lupron Mktg. & Sales Practices Litig.,
`295 F. Supp. 2d 148 (D. Mass. 2003) ............................................................................. 58
`
`In re Magnesium Oxide Antitrust Litig.,
`2011 WL 5008090 (D.N.J. Oct. 20, 2011) ............................................................... passim
`
`McCullough v. Zimmer,
`382 Fed. Appx. 225 (3d Cir. 2010) .................................................................................. 23
`
`McCullough v. Zimmer, Inc.,
`2009 WL 775402 (W.D. Pa. Mar. 18, 2009) .................................................................. 64
`
`Med. Arts Pharmacy of Stamford, Inc. v. Blue Cross & Blue Shield of Connecticut,
`Inc.,
`675 F.2d 502 (2d Cir.1982)............................................................................................... 12
`
`In re Mercedes-Benz Antitrust Litig.,
`157 F. Supp. 2d 355 (D.N.J. 2001) .................................................................... 72, 73, 75
`
`In re Mercedes-Benz Antitrust Litig.,
`364 F. Supp. 2d 468 (D. N. J. 2005) ............................................................................... 38
`
` 
` 
`
`vii
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`

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` 
`
`Metrix Warehouse, Inc. v. Daimer-Benz,
`1982 WL 1870 (D. Md. June 4, 1982) ............................................................................ 24
`
`Miami Products & Chemical Co. v. Olin Corporation,
`449 F. Supp. 3d 136 (W.D.N.Y. 2020) .............................................................. 30, 31, 36
`
`Michigan State Podiatry Ass’n v. Blue Cross and Blue Shield of Michigan,
`671 F. Supp. 1139 (E.D. Mich.1987) .............................................................................. 12
`
`Milliken & Co. v. CNA Holdings, Inc.,
`2011 WL 3444013 (W.D.N.C. Aug. 8, 2011) ................................................................ 29
`
`MM Steel, L.P. v. JSW Steel (USA) Inc.,
`806 F.3d 835 (5th Cir. 2015) ............................................................................................ 48
`
`Modern Marketing Services, Inc. v. Federal Trade Commission,
`149 F.2d 970 (7th Cir. 1945) ............................................................................................ 10
`
`Monsanto Co. v. Spray-Rite Serv. Corp.,
`465 U.S. 752 (1984) ........................................................................................................... 37
`
`N.V.E., Inc. v. Palmeroni,
`2015 WL 13649814 (D.N.J. Feb. 23, 2015) ................................................................... 62
`
`Napoli v. United States,
`45 F.3d 680 (2d Cir. 1995)................................................................................................ 61
`
`National Society of Professional Engineers v. U.S.,
`435 U.S. 679 (1978) ........................................................................................................... 46
`
`Nelson v. Nelson,
`833 F.3d 965 (8th Cir. 2016) ............................................................................................ 64
`
`Newton v. Tyson Foods, Inc.,
`207 F.3d 444 (8th Cir. 2000) ............................................................................................ 53
`
`Ouwinga v. Benistar 419 Plan Servs., Inc.,
`694 F.3d 783 (6th Cir. 2012) ............................................................................................ 61
`
`In re Packaged Ice Antitrust Litig.,
`723 F. Supp. 2d 987 (E.D. Mich. 2010) ......................................................................... 29
`
`Palmer v. BRG of Ga., Inc.,
`498 U.S. 46 (1990) ............................................................................................................. 43
`
` 
` 
`
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` 
`
`Paper Sys. Inc. v. Nippon Paper Indus. Co.,
`281 F.3d 629 (7th Cir. 2002) ............................................................................................ 78
`
`Pappa v. Unum Life Ins. Co. of America,
`2008 WL 744820 (M.D. Pa. Mar. 18, 2008) .................................................................. 61
`
`Pegram v. Herdrich,
`530 U.S. 211 (2000) ........................................................................................................... 14
`
`Pharmaceutical Care Management Ass’n. v. Rowe,
`429 F.3d 294 (1st Cir 2005) .............................................................................................. 15
`
`In re Pharmaceutical Industry Average Wholesale Price Litig.,
`230 F.R.D. 61 (D. Mass. 2005) ................................................................................. 13, 19
`
`Phillips v. County of Allegheny,
`515 F.3d 224 (3d Cir. 2008) ............................................................................................. 37
`
`Poling v. K. Hovnanian Enters.,
`99 F. Supp. 2d 502 (D.N.J. 2000) ............................................................................. 76, 77
`
`ProFoot, Inc. v. MSD Consumer Care, Inc.,
`2014 WL 5446710 (D.N.J. 2014) .................................................................................... 33
`
`In re Propranolol Antitrust Litig.,
`249 F. Supp. 3d 712 (S.D.N.Y. 2017) ............................................................................. 29
`
`Prudential Ins. Co. of Am. v. U.S. Gypsum Co.,
`359 F.3d 226 (3d Cir. 2004) ............................................................................................. 76
`
`Rangen, Inc. v. Sterling Nelson & Sons,
`351 F.2d 851 (9th Cir. 1965), overruled on other grounds by Rotec Industries,
`Inc. v. Mitsubishi Corp, 348 F.3d 1116 (9th Cir. 2003) ............................................... 9, 10
`
`Reves v. Ernst & Young,
`507 U.S. 170 (1993) .................................................................................................... 60, 61
`
`Robinson v. Jackson Hewitt, Inc.,
`2019 WL 5617512 (D.N.J. Oct. 31, 2019) ..................................................................... 68
`
`Rossi v. Standard Roofing, Inc.,
`156 F.3d 452 (3d Cir. 1998) ...................................................................................... 37, 44
`
` 
` 
`
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` 
`
`Schmuck v. United States,
`489 U.S. 705 (1989) ........................................................................................................... 58
`
`Schuylkill Energy Res., Inc. v. Pa. Power & Light Co.,
`113 F.3d 405 (3d Cir. 1997) ............................................................................................. 23
`
`Seaboard Supply Co. v. Congoleum Corp.,
`770 F.2d 367 (3d Cir. 1985) ........................................................................................... 6, 7
`
`Shaw v. Nissan North America, Inc.,
`220 F. Supp. 3d 1046 (C.D. Cal. Oct. 24, 2016) ........................................................... 64
`
`Smith v. Jones, Gregg, Creehan & Gerace LLP,
`2008 WL 5129916 (W.D. Pa. Dec. 5, 2008) .................................................................. 64
`
`St. Luke’s Health Network, Inc. v. Lancaster Gen. Hosp.,
`967 F.3d 295 (3d Cir. 2020) ............................................................................................. 56
`
`Starr v. Sony BMG Music Entertainment,
`592 F.3d 314 (2d Cir. 2010) ............................................................................................. 35
`
`Stephen Jay Photography, Ltd v. Olan Mills, Inc.,
`903 F.2d 988 (4th Cir. 1990) .......................................................................................... 6, 8
`
`Stephens, Inc. v. Geldermann, Inc.,
`962 F.2d 808 (8th Cir. 1992) ............................................................................................ 64
`
`Suessenbach Family Ltd Partnership v. Access Midstream Partners, L.P.,
`2015 WL 1470863 (M.D. Pa. Mar. 31, 2015) ................................................................ 61
`
`Texaco Inc. v. Dagher,
`547 U.S. 1 (2006) ............................................................................................................... 35
`
`Toledo Mack Sales & Service, Inc. v. Mack Trucks, Inc.,
`530 F.3d 204 (3d. Cir. 2008) ..................................................................................... 47, 48
`
`Toys “R'' Us, Inc. v. F.T.C.,
`221 F.3d 928 (7th 2000) .................................................................................................... 43
`
`U.S. v. All Star Indus.,
`962 F.2d 465 (5th Cir. 1992) ............................................................................................ 44
`
`U.S. v. Apple, Inc.,
`791 F.3d 290 (2d Cir. 2015) ................................................................................ 43, 44, 48
`
` 
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` 
`
`U.S. v. Bryant,
`655 F.3d 232 (3d Cir. 2011) ...................................................................................... 19, 20
`
`U.S. v. Dischner,
`960 F.2d 870 (9th Cir. 1992) .............................................................................................. 9
`
`United States v. Job,
`387 F. App’x 445 (5th Cir. 2010) .................................................................................... 51
`
`United States v. Norton,
`17 F. App’x 98 (4th Cir. 2001) ......................................................................................... 51
`
`United States v. Parise,
`159 F.3d 790 (3d Cir. 1998) ............................................................................................. 61
`
`United States v. Socony-Vacuum Oil Co.,
`310 U.S. 150 (1940) ........................................................................................................... 43
`
`United States v. Trenton Potteries Co.,
`273 U.S. 392 (1927) ........................................................................................................... 43
`
`United States v. Yielding,
`657 F.3d 688 (8th Cir. 2011) ............................................................................................ 51
`
`In re Warfarin Antitrust Litig.,
`1998 WL 883469 (D. Del. Dec. 7, 1998), rev’d in part on other grounds,
`214 F.3d 395 (3d Cir. 2000) ............................................................................................. 18
`
`Warren General Hospital v. Amgen, Inc.,
`643 F.3d 77 (3d Cir. 2011)........................................................................................... 4, 23
`
`Yeager’s Fuel, Inc. v. Pennsylvania Power and Light Co.,
`953 F. Supp. 617 (E.D. Pa. 1997) ..................................................................................... 8
`
`Commonwealth of Pennsylvania ex. rel. Zimmerman v. PepsiCo, Inc.,
`836 F.2d 173 (3d Cir. 1988) ...................................................................................... 35, 36
`
`Statutes and Rules
`
`18 U.S.C. § 1964(c) .................................................................................................................. 67
`
`42 U.S.C. § 1320z-7b(b)(3)(A) ............................................................................................... 51
`
`43 U.S.C. § 1320-7b(b)(3)(E) ................................................................................................. 51
`
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` 
`
`Clayton Act Section 4, 15 U.S.C. § 15(a) ...................................................................... 20, 25
`
`Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. §§ 1962
`(c) and (d) .............................................................................................................................. 4
`
`Robinson-Patman Act Section 2(c), 15 U.S.C. § 13(c) ................................................ passim
`
`Sherman Act Section 1, 15 U.S.C. § 1 ............................................................................ passim
`
`Social Security Act Section 1128B(b), 42 U.S.C. § 1320a-7b ............................................ 13
`
`Soft Drink Interbrand Competition Act of 1980, 15 U.S.C. §§ 3501–03 ....................... 36
`
`Fed. R. Civ. P. 15 ..................................................................................................................... 79
`
`Fed. R. Civ. P. 8 ....................................................................................................................... 26
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`Fed. R. Civ. P. 12(b)(6) ........................................................................................................... 18
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`Other Authorities
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`42 C.F.R. § 1001.952(h) .......................................................................................................... 51
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`82 F.R. 2340 ............................................................................................................................. 52
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`Cong., Insulin: Examining the Factors Driving the Rising Cost of a Century Old
`Drug (Comm. Print 2021) ............................................................................................ 3, 17
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`Drug Rebates: The Real Cause of High Insulin Prices,
`https://cheapinsulin.org/ ................................................................................................ 18
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`Exec. Order No. 13,939, 85 Fed. Reg. 45,759, 45,759 (2020) .......................................... 12
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`xii
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`Case 3:20-cv-03426-BRM-LHG Document 139 Filed 03/15/21 Page 14 of 94 PageID: 1481
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`I.
`Insulin is necessary to preserve the health of those within the nation’s
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`INTRODUCTION AND BACKGROUND
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`burgeoning diabetic population. See First Amended Complaint (“FAC”) ¶¶ 41-48.
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`Rather than meet this need with reasonably priced products, over the past decade, the
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`three insulin producers that control this market1 have dramatically increased insulin
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`prices in lockstep to an unconscionable level. Id. ¶¶ 120-129. These rapidly escalating
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`prices are not the result of chance, rising manufacturing costs, innovation or any other
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`legitimate economic justification. Id. ¶¶ 124-127. Rather, they are a consequence of
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`greed operating within a market structure that creates incentives for collusion and
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`abuse. Id. ¶¶ 138-142.
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`At the retail level in this country, the cost of prescription medications is paid in
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`substantial measure by Third Party Payors (“TPPs”) such as insurance companies and
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`governmental entities. Id. ¶¶ 54. However, TPPs lack the expertise to design, manage,
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`and administer their prescription drug benefit plans, so they employ Pharmacy Benefit
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`Managers or “PBMs” to do so. Id. ¶¶ 60, 66-67. Over time, PBMs consolidated their
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`1 Defendants, Eli Lilly and Company, Novo Nordisk, Inc., and Sanofi-Aventis U.S.
`LLC (collectively, the “Manufacturers”) produce the long-acting analog insulins,
`Lantus and Levemir and the rapid-acting analog insulins, NovoLog and Humalog.
`Lantus and Levemir are therapeutically interchangeable for their intended purpose as
`are NovoLog and Humalog. FAC ¶¶ 50, 52. Collectively, these insulin products are
`referred to as the “Insulin Drugs.” The Manufacturers have long dominated the
`markets for analog insulin products. Id. ¶¶ 17-19, 49.
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`1
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`Case 3:20-cv-03426-BRM-LHG Document 139 Filed 03/15/21 Page 15 of 94 PageID: 1482
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`economic power so that the three defendant PBMs (and their affiliated companies)2
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`ultimately controlled 85% percent of the PBM market, representing 180 million
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`insured lives. Id. ¶¶ 63, 66, 115. One of the principal legitimate objectives of a PBM
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`is to aggregate the purchasing power of numerous TPPs to achieve sufficient
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`economic muscle to negotiate lower prescription drug prices. Id. ¶¶ 3, 66-80, 83, 88,
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`90, 92, 93, 99, 105-107. PBMs deploy this economic muscle through control of the
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`TPP’s “formularies.” Id. Formulary listings establish whether and to what extent a
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`specific drug is covered by a given TPP’s prescription drug plan. Id. ¶ 68. Therefore,
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`favorable formulary placement will substantially increase the sale of a given drug,
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`while exclusion will result in a huge sales decline. Id. ¶¶ 72, 76, 77-80.
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`Instead of using their economic clout to reduce insulin prices, however, the
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`PBMs did just the opposite. In exchange for favorable formulary placement, the
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`PBMs demanded that the Manufacturers execute contracts that provided the PBMs
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`with ever incr