AstraZeneca, Generic Drugmakers Face Nexium Class Action

AstraZeneca Plc and three generic-drug makers must face class-action allegations they overcharged consumers by delaying low-cost versions of the heartburn medication Nexium for six years, a judge ruled.

U.S. District Judge William Young in Boston ruled yesterday that union health plans and insurance companies can join together in pursuing antitrust claims against AstraZeneca, Teva Pharmaceutical Industries Ltd., Dr. Reddy’s Laboratories Inc. and Ranbaxy Laboratories Ltd.

They face claims that AstraZeneca paid “substantial sums” to generic drugmakers to delay copies of Nexium for six years until May 27, 2014, which prevented prices from falling through the introduction of cheaper copies. On June 17, the U.S. Supreme Court made it easier to sue drugmakers over such “pay for delay” or “reverse payment” cases.

Young ruled that a plaintiffs’ expert had adequately demonstrated that prices “continued artificially high as a result of the defendants’ reverse payment agreements” and that all class members had to pay a “supracompetitive price.”

The judge also found that an expert for the companies showed that rebates by London-based AstraZeneca, at as much as 50 percent of the retail price for Nexium, buffered “any overcharge injury resulting from generic foreclosure.”

Buyer Discounts

Young said he refused to accept AstraZeneca’s filings under seal about discounts granted to various buyers on the grounds that they were confidential business data. The company, he said, seeks to avoid embarrassment at revealing relationships that favored some buyers over others, he said.

In seeking such a “litigation advantage,” AstraZeneca “just doesn’t want anyone else to know what it is doing,” he wrote in certifying the class-action case. “In short, it wants to win -- but it doesn’t want me to explain why (or why not). This is simply unacceptable. Courts are public institutions.”

Michele Meixell, an AstraZeneca spokeswoman, said in an e-mail that the company “respectfully disagrees that any class should be certified, and we are reviewing the opinion and considering our options for an immediate appeal.”

Officials with the generic drugmakers didn’t immediately respond to e-mails seeking comment on the ruling.

The case is In Re Nexium (Esomeprazole) Antitrust Litigation, 12-md-02409, U.S. District Court, District of Massachusetts (Boston).

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