City of Rockford v. Mallinckrodt ARD, Inc.
United States District Court for the Northern District of Illinois
January 25, 2019, Decided; January 25, 2019, Filed
Case No: 17 CV 50107
[*742] MEMORANDUM OPINION AND ORDER
Plaintiffs, City of Rockford, Illinois, and Acument Global Technologies Inc., filed a second amended complaint (the "SAC") against two groups of defendants: (1) Mallinckrodt plc and Mallinckrodt ARD, Inc. [*743] (including its acquisition of "Questcor Pharmaceuticals, Inc.") (collectively, "Mallinckrodt"); and (2) Express Scripts Holding Company and its four wholly-owned subsidiaries, Express Scripts, Inc. ("ESI"), Curascript, Inc., Accredo Health Group, Inc., and United Biosource Corp. ("UBC") (collectively, "Express Scripts"), pursuant to federal and state antitrust and consumer protection laws, the Racketeer Influenced and Corrupt Organizations Act ("RICO"), various state-law claims, and [**3] 28 U.S.C. §§ 2201-2202 for declaratory judgment. Before this court are defendants' motions to dismiss. For the reasons that follow, defendants' motions to dismiss are granted in part and denied in part.
The following facts are drawn from the allegations in the SAC. Because this case comes before the court pursuant to a motion to dismiss, the court accepts all non-conclusory allegations in the SAC as true.
A. Acthar and the Exclusive Dealing Arrangement
Acthar is an adrenocorticotropic hormone ("ACTH") drug, which causes the body to produce cortisone and other steroid hormones. SAC ¶ 41. In 1952, the Food and Drug Administration approved Acthar's application to over fifty conditions. Id. ¶ 40. One of those conditions is infantile spasms, a serious condition but one with an annual patient population of less than 2,000 children. Id. ¶ 45. In 2001, Questcor Pharmaceuticals, Inc. acquired the rights to Acthar. In 2014, Mallinckrodt plc, another pharmaceutical company, acquired Questcor and, with it, Acthar. Id. ¶ 44. As a result of the acquisition Questcor's name was changed to Mallinckrodt ARD, Inc. Id. ¶ 22.
Before 2007, Acthar was distributed to any doctor, hospital, wholesaler, or specialty pharmacy [**4] who requested the drug to treat seriously ill patients. Id. ¶ 47. On August 27, 2007, Mallinckrodt embarked on a "new strategy" that sought to limit Acthar's distribution by designating Express Scripts as Mallinckrodt's sole distributor [*744] of Acthar. Id. ¶¶ 48-49, 221. Plaintiffs allege that the "new strategy" is in fact a vertical price-fixing conspiracy, in which Mallinckrodt used Express Scripts as its exclusive distributor of Acthar through a program called the "Acthar Support & Access Program" (the "ASAP") to raise prices, restrict distribution, and stifle competition. According to plaintiffs, the structure of the ASAP allows defendants to restrict the distribution of Acthar to just one distributor, Express Scripts, thereby eliminating other distributors from negotiating for lower prices for Acthar. Id. ¶¶ 48, 90, 231.Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
360 F. Supp. 3d 730 *; 2019 U.S. Dist. LEXIS 12171 **; 2019-1 Trade Cas. (CCH) P80,658; 2019 WL 330471
City of Rockford, et al., Plaintiffs, v. Mallinckrodt ARD, Inc., et al., Defendants.
Subsequent History: Reconsideration denied by, Motion denied by City of Rockford v. Mallinckrodt ARD, Inc., 2019 U.S. Dist. LEXIS 103885 (N.D. Ill., May 3, 2019)
Prior History: City of Rockford v. Mallinckrodt Ard, Inc., 2018 U.S. Dist. LEXIS 41085 (N.D. Ill., Feb. 2, 2018)
antitrust, conspiracy, enrichment, misrepresentation, anticompetitive, unjust, state-law, consumer, Acquisition, replead, conspired, mail, recitals, price-fixing, monopoly, prong, covenant, patients, manufacturer, racketeering, monopolization, declaratory, promissory, estoppel, concurrence, exhaustion, indirect, pharmacy, defraud, unnamed
Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleadings, Complaints, Requirements for Complaint, Antitrust & Trade Law, Racketeer Influenced & Corrupt Organizations, Claims, Fraud, Heightened Pleading Requirements, Fraud Claims, Torts, Business Torts, Fraud & Misrepresentation, Actual Fraud, Multiple Defendants, Concerted Action, Civil Conspiracy, Responses, Affirmative Defenses, Justiciability, Standing, Injury in Fact, Constitutional Law, Case or Controversy, Elements, Private Actions, Sherman Act, Regulated Practices, Price Fixing & Restraints of Trade, Pleading & Practice, Heightened Pleading Requirements, Sherman Act, Scope, Price Fixing & Restraints of Trade, Per Se Rule & Rule of Reason, Scope, Monopolization Offenses, Price Discrimination, Competitive Injuries, Exclusive & Reciprocal Dealing, Exclusive Dealing, Clayton Act, Remedies, Injunctions, Purchasers, Indirect Purchasers, Special Proceedings, Class Actions, Certification of Classes, The Judiciary, Standing, Consumer Protection, Deceptive & Unfair Trade Practices, State Regulation, Supremacy Clause, Federal Preemption, Governments, Legislation, Statutory Remedies & Rights, Class Actions, Public Enforcement, State Civil Actions, Business & Corporate Compliance, Breach, Breach of Contract Actions, Elements of Contract Claims, Contract Conditions & Provisions, Contracts Law, Contract Conditions & Provisions, Contracts Law, Contract Interpretation, Contract Formation, Offers, Definite Terms, Contract Interpretation, Ambiguities & Contra Proferentem, Intent, Good Faith & Fair Dealing, Consideration, Promissory Estoppel, Equitable Relief, Quantum Meruit, Types of Contracts, Quasi Contracts, Preliminary Considerations, Equity, Adequate Remedy at Law, Exhaustion of Remedies, Contractual Remedies, Actual Fraud, Civil Conspiracy, Declaratory Judgments, State Declaratory Judgments, Scope of Declaratory Judgments