Issue: Exclusionary agreements not to compete
Lieff Cabraser represents California consumers and third party payors in a class action lawsuit filed in California state court charging that Bayer Corporation, Barr Laboratories, and other generic prescription drug manufacturers conspired to restrain competition in the sale of Bayer’s blockbuster antibiotic drug Ciprofloxacin, sold as Cipro. Between 1997 and 2003, Bayer paid its would-be generic drug competitors nearly $400 million to refrain from selling more affordable versions of Cipro. As a result, consumers were forced to pay inflated prices for the drug — frequently prescribed to treat urinary tract, prostate, abdominal, and other infections.
The Trial Court granted defendants’ motion for summary judgment, which the Appellate Court affirmed in October 2011. Plaintiffs sought review before the California Supreme Court and were successful. Following briefing, the case was stayed pending the U.S. Supreme Court’s decision in FTC v. Actavis. After the U.S. Supreme Court in Actavis overturned the Appellate Court’s ruling that pay-for-delay deals in the pharmaceutical industry are generally legal, plaintiffs and Bayer entered into settlement negotiations. In November 2013, the Trial Court approved a $74 million settlement with Bayer.
On May 7, 2015, the California Supreme Court reversed the grant of summary judgment to Defendants and resoundingly endorsed the rights of consumers to challenge pharmaceutical pay-for-delay settlements under California competition law. The Court held that “[p]arties illegally restrain trade when they privately agree to substitute consensual monopoly in place of potential competition.”
Additional settlements were reached with the remaining defendants, bringing total settlements to $399 million (exceeding plaintiffs’ damages estimate by approximately $68 million), a result the Trial Court described as “extraordinary.” The Trial Court granted final approval on April 21, 2017, adding that it was “not aware of any case” that “has taken roughly 17 years,” where, net of fees, end-payor “claimants will get basically 100 cents on the dollar[.]”
Some objectors are appealing the settlements. Objectors and their counsel objected to part of the settlement notice and to the attorneys’ fees. As of early 2018, the appeals are slowly progressing.
For their above-noted work on the Cipro matter, Lieff Cabraser attorneys Eric B. Fastiff, Brendan P. Glackin, and Dean M. Harvey were recognized by California Lawyer and the Daily Journal with the 2016 California Lawyer of the Year Award.
Further information on the settlement and distribution of funds can be found at www.ciprosettlement.com.