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United Food & Commer. Workers Unions & Emplrs. Midwest Health Bens. Fund v. Warner Chilcott Ltd. (In re Asacol Antitrust Litig.)

United States Court of Appeals for the First Circuit

October 15, 2018, Decided

No. 18-1065

Opinion

 [*44]  KAYATTA, Circuit Judge. Drug manufacturer Warner Chilcott Limited pulled one of its products -- Asacol -- from the market just months before the [**2]  drug's patent protection expired. Warner simultaneously introduced a similar but not exactly identical substitute drug called Delzicol, the patent protection for which ran years longer. This coordinated withdrawal and entry of the two drugs allegedly precluded generic manufacturers from introducing a generic version of Asacol, which would have provided a lower-cost alternative to Warner's drugs Delzicol and Asacol HD, a version of Asacol that was also still under patent protection. Crying foul, the named plaintiffs in this case filed a class action alleging a violation of the consumer protection and antitrust laws  [*45]  of twenty-five states and the District of Columbia. On plaintiffs' motion, the district court certified a class of all Asacol purchasers who subsequently purchased Delzicol or Asacol HD in one of those twenty-six jurisdictions. In so doing, the court found that approximately ten percent of the class had not suffered any injury attributable to defendants' allegedly anticompetitive behavior. Nevertheless, the district court determined that those uninjured class members could be removed in a proceeding conducted by a claims administrator. We find this approach to certifying [**3]  a class at odds with both Supreme Court precedent and the law of our circuit. We therefore reverse.

Asacol is a pharmaceutical drug that treats mild to moderate ulcerative colitis, a chronic inflammatory bowel disorder. Developed and first manufactured by Procter and Gamble Pharmaceuticals, Asacol debuted on the market in 1992 and received the protection of two patents. Those patents expired on July 30, 2013. In 2008, Procter and Gamble brought a new variation of Asacol to market, dubbed Asacol HD, which treated moderate, but not mild, ulcerative colitis. This new drug differed from Asacol in two key ways: it included twice the dosage, and it replaced Asacol's single-layer coating with a dual-layer coating. Asacol HD's patent protection extended years beyond that of Asacol. In 2009, Warner Chilcott purchased Procter and Gamble's pharmaceutical portfolio, which included both Asacol and Asacol HD.

On March 18, 2013, only a few months shy of the end of Asacol's patent protection, Warner stopped selling and marketing Asacol. On the same day, Warner introduced a new drug: Delzicol. Delzicol, like Asacol, treats ulcerative colitis. The two drugs contain the same active ingredient and dosage, [**4]  and sold for the same price. Unlike Asacol, Delzicol comes in a capsule that does not contain dibutyl phthalate ("DBP"). DBP is a plasticizer, the safety of which appears to have been the subject of a dialogue between the FDA and Asacol's manufacturers.

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907 F.3d 42 *; 2018 U.S. App. LEXIS 28920 **; 2018-2 Trade Cas. (CCH) P80,552; 101 Fed. R. Serv. 3d (Callaghan) 1618

IN RE: ASACOL ANTITRUST LITIGATION;UNITED FOOD & COMMERCIAL WORKERS UNIONS AND EMPLOYERS MIDWEST HEALTH BENEFITS FUND, on behalf of itself and all others similarly situated; MARK ADORNEY, Plaintiffs, TEAMSTERS UNION 25 HEALTH SERVICES & INSURANCE PLAN, on behalf of themselves and all others similarly situated; NECA-IBEW WELFARE TRUST FUND, on behalf of themselves and all others similarly situated; WISCONSIN MASONS' HEALTH CARE FUND, on behalf of itself and all others similarly situated; MINNESOTA LABORERS HEALTH AND WELFARE FUND, on behalf of itself and all others similarly situated; AFSCME HEALTH AND WELFARE FUND; PENNSYLVANIA EMPLOYEES BENEFIT TRUST FUND; AHOLD U.S.A., INC.; ROCHESTER DRUG CO-OPERATIVE, INC.; VALUE DRUG COMPANY; MEIJER, INC.; MEIJER DISTRIBUTION, INC., Plaintiffs, Appellees, v. WARNER CHILCOTT LIMITED; ALLERGAN, INC., f/k/a Actavis, PLC; ALLERGAN USA, INC.; ALLERGAN SALES, LLC; ALLERGAN, PLC, Formerly known as Actavis, PLC, Defendants, Appellants, ZYDUS PHARMACEUTICALS USA INC.; CADILA HEALTHCARE LIMITED; WARNER CHILCOTT (US), LLC; WARNER CHILCOTT SALES (US), LLC; WARNER CHILCOTT COMPANY, LLC, Defendants.

Prior History:  [**1] APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Hon. Denise J. Casper, U.S. District Judge.

In re Asacol Antitrust Litig., 2017 U.S. Dist. LEXIS 158491 (D. Mass., Sept. 14, 2017)In re Asacol Antitrust Litig., 323 F.R.D. 451, 2017 U.S. Dist. LEXIS 186009 (D. Mass., Nov. 9, 2017)

CORE TERMS

class member, uninjured, district court, plaintiffs', generic, named plaintiff, Antitrust, class action, predominance, consumers, purchases, class certification, certification, challenges, damages, aggregate, patent, rights, defendants', unrebutted, certify, brand, individual issues, individualized, injury-in-fact, litigate, questions, products, drugs, class representative

Civil Procedure, Appeals, Standards of Review, De Novo Review, Constitutional Law, The Judiciary, Case or Controversy, Standing, Class Actions, Prerequisites for Class Action, Adequacy of Representation, Standing, Third Party Standing, Abuse of Discretion, Predominance, Clearly Erroneous Review, Special Proceedings, Certification of Classes, Class Members, Class Actions, Preliminary Considerations, Justiciability