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In re Propranolol Antitrust Litig.

United States District Court for the Southern District of New York

April 6, 2017, Decided

16-cv-09901 (JSR)




Plaintiffs FKW Holdings and Cesar Castillo (the "Direct Purchasers") and Sergeants Benevolent Association Health & Welfare Fund and American Federation of State, County and Municipal Employees District Council 37 Health & Security Plan (the "End-Payors") bring putative nationwide class actions alleging that defendants illegally conspired to fix the price of the generic drug, propranolol hydrochloride ("Propranolol"). By bottom-line Order dated February 27, 2017 (the "Bottom-Line Order"), the Court denied the motion by defendants Heritage Pharmaceuticals Inc. ("Heritage") and Upsher-Smith [**5]  Laboratories, Inc. ("Upsher-Smith") to dismiss the Direct Purchasers' original complaints for lack of personal jurisdiction. See ECF No. 108. Defendants now jointly move to dismiss the Direct Purchasers' and End-Payors' consolidated amended complaints. For the reasons set forth below, this Opinion and Order denies defendants' instant motions, except for part of their motion to dismiss certain state law claims in the End-Payors' action. This Opinion and Order also explains the reasoning for the previous Bottom-Line Order.

] On a motion to dismiss, the Court accepts all well-pleaded factual allegations as true and draws all reasonable inferences in favor of the non-moving party. See Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir. 2008). In the antitrust context, stating a claim under Section 1 of the Sherman Act "requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made. Asking for plausible grounds to infer an agreement does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).

Propranolol is the generic version of Inderal and comes in two forms: capsules and tablets. Direct [**6]  Purchasers' Consolidated Amended Complaint ("DPP") ¶¶ 81-83, ECF No. 109; End-Payors' Consolidated Amended Complaint ("EPP") ¶¶ 1-2, 46-51, Dkt. No. 17-cv-01039, ECF No. 60. The pleadings allege two conspiracies, with one overlapping defendant, to manipulate the price of both forms of the drug. DPP ¶¶ 8-9; EPP ¶¶ 1-2, 46-51. The defendants in the "Capsules Conspiracy" are Actavis Elizabeth, LLC ("Actavis"), Breckenridge Pharmaceuticals, Inc. ("Breckenridge"), and Upsher-Smith (collectively, the "Capsules Defendants"). DPP ¶¶ 46-62; EPP ¶¶ 19-31. The defendants in the "Tablets Conspiracy" are Mylan Inc., Mylan Pharmaceuticals Inc., and UDL Laboratories, Inc. (collectively, "Mylan"), Teva Pharmaceuticals USA, Inc., and Pliva, Inc. (collectively, "Teva"), Endo International PLC, Par Pharmaceuticals Holdings, Inc., and Qualitest Pharmaceuticals, Inc. (collectively, "Par"), Heritage, and Actavis (collectively, the "Tablets Defendants"). Id.

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249 F. Supp. 3d 712 *; 2017 U.S. Dist. LEXIS 53390 **; 2017-1 Trade Cas. (CCH) P79,954; 2017 WL 1287515



End-Payors', Propranolol, antitrust, conspiracy, tablets, capsules, consumer, consolidated, conspire, self-interest, certification, manufacturers, Pharmaceuticals, Bottom-Line, nationwide, discovery, enrichment, unjust, manipulate, reimbursed, deceptive, shortage, ongoing, overlap, chain

Antitrust & Trade Law, Sherman Act, Claims, Civil Procedure, Responses, Defenses, Demurrers & Objections, Motions to Dismiss, Evidence, Inferences & Presumptions, Inferences, Scope, Regulated Practices, Private Actions, Sherman Act, Price Fixing & Restraints of Trade, Cartels & Horizontal Restraints, Price Fixing, Pleadings, Complaints, Requirements for Complaint, Motions to Dismiss, Failure to State Claim, Torts, Multiple Defendants, Concerted Action, Civil Conspiracy, Standing, Requirements, Special Proceedings, Class Actions, Certification of Classes, Constitutional Law, Case or Controversy, Particular Parties, Jurisdiction, Jurisdictional Sources, Constitutional Sources, Preliminary Considerations, Justiciability, Standing, Class Members, Named Members, Price Fixing & Restraints of Trade, State Regulation, Federal & State Interrelationships, Choice of Law, Prerequisites for Class Action, Burdens of Proof, Allocation, Governments, Legislation, Statute of Limitations, Extensions & Revivals, Time Limitations, Tolling, In Rem & Personal Jurisdiction, In Personam Actions, Due Process, Bill of Rights, Fundamental Rights, Procedural Due Process, Statutory Sources, Subject Matter Jurisdiction, Federal Questions, In Personam Actions, Minimum Contacts, Jurisdiction, Judicial Notice, Scientific & Technical Facts