Federal Judge Approves $9M Settlement in Allergan 'Product-Hopping' Suit
A federal judge in Delaware gave final approval Tuesday to a $9 million class-action settlement in Hartig Drug Co.'s antitrust suit against Allergan, after an appeals court in 2016 revived claims that Allergan had tried to suppress generic versions of its eye-care products.
November 13, 2018 at 04:28 PM
3 minute read
A federal judge in Delaware gave final approval Tuesday to a $9 million class-action settlement in Hartig Drug Co.'s antitrust suit against Allergan, after an appeals court in 2016 revived claims that Allergan had tried to suppress generic versions of its eye-care products.
The ruling, from U.S. District Senior Judge Joseph F. Bataillon of the District of Delaware, brought an end to nearly four and a half years of litigation in the product-hopping case, which had been closely watched by the pharmaceutical industry.
In February, Allergan, Senju Pharmaceutical Co. and Kyorin Pharmaceutical Co. agreed to pay $9 million to a class of consumers and other purchasers who bought Zymar or Zymaxid eye drops between June 2010 and December 2017. In return, all related claims against Allergan and its co-defendants would be released with prejudice, according to court documents.
“The settlement falls well within the range of reasonableness,” Bataillon said Tuesday in a four-page order. “The settlement does not unreasonably favor plaintiff or any segment of the settlement class.”
Hartig, an indirect purchaser that bought the drugs from AmerisourceBergen, sued in 2014, alleging that Allergan had conspired to muscle planned generics out of the market and sell its eye drops at an inflated price. Former U.S. District Judge Sue L. Robinson dismissed the suit for lack of jurisdiction, but Hartig appealed to the U.S. Court of Appeals for the Third Circuit in 2015.
On appeal, the case was seen as potentially precedent-setting, and some of the country's top pharmaceutical companies worried that it could upset the common practice whereby drug wholesalers assign antitrust claims downstream to pharmacies to bring anti-competitive lawsuits, rather than the pharmaceutical companies themselves suing the sellers they purchase from.
Several pharmacies and drug chains aligned themselves with Hartig, filing an amicus brief in which they argued an adverse ruling could disrupt the way they do business.
Ultimately, a three-judge panel of the appeals court agreed that Allergan had established a “judicially redressable” injury, and found that Robinson, who retired in 2017, had improperly tossed the case for lack of subject-matter jurisdiction. The ruling vacated Robinson's dismissal and remanded the case for further proceedings.
After engaging in extensive negotiations before mediator David A. Rotman, the parties emerged with a settlement agreement, which received preliminary approval in late February. Bataillon conducted a fairness hearing Nov. 9.
“The settlement was the result of the parties' good-faith negotiations. The settlement was entered into by experienced counsel and only after extensive arm's-length negotiations and was only achieved after the involvement of an experienced mediator,” Bataillon wrote Tuesday.
Hartig's attorneys have asked for $3 million in attorney fees for litigating the case.
Hartig was represented by Brent W. Landau and Melinda R. Coolidge of Hausfeld in Philadelphia and New York and Gregory A. Frank and Marvin L. Frank of Frank in New York. J. Clayton Athey and Eric J. Juray of Prickett, Jones & Elliott acted as local counsel in the case.
Allergan was represented by M. Sean Royall, Ashley E. Johnson and Jason C. McKenney of Gibson, Dunn & Crutcher in Washington, D.C., and Jack B. Blumenfeld of Morris, Nichols, Arsht & Tunnell.
The case was captioned Hartig Drug v. Senju Pharmaceutical.
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