In re: Skelaxin (Metaxalone) Antitrust Litigation, Cas No. 1:12-md-2343, 2013 U.S. Dist. LEXIS 70968 (E.D. Tenn.

May 20, 2013) In In re: Skelaxin (Metaxalone) Antitrust Litigation, the Eastern District of Tennessee held that Noerr-Pennington immunity did not shield the Defendants from federal and state antitrust claims, and that Plaintiffs sufficiently pled factual allegations to meet the Twombly standard. The Court accordingly denied the Defendants motion to dismiss. Plaintiffs are a collection of large businesses, pharmacies, labor organizations, health insurance companies and entities, and individuals that purchased or reimbursed purchasers for buying metaxalone, a prescription muscle relaxant sold under the brand name Skelaxin. Plaintiffs alleged the Defendants conspired to delay the entry of generic versions of Skelaxin by, among other things, filing baseless lawsuits against potential generic manufacturers and filing baseless petitions to the Federal Drug Administration (FDA) to delay approval of Abbreviated New Drug Applications (ANDAs) filed by generic manufacturers. The Plaintiffs alleged that these lawsuits and petitions were a sham and were therefore not protected by Noerr-Pennington immunity. The Court agreed that, at this stage, Plaintiffs alleged enough to survive the motion to dismiss. Defendants are two pharmaceutical companies King Pharmaceuticals and Mutual Pharmaceutical Company. King acquired the rights to manufacture and sell Skelaxin as well as license rights to two other related patents (the 128 and the 102 patents). Mutual is a manufacturer of generic pharmaceutical products. Mutual filed an ANDA application in 2003 seeking FDA approval to market its generic metaxalone product by certifying that the 102 patent was either invalid or not infringed by Mutuals generic product. King subsequently filed an infringement suit against Mutual as to the 102 patent. In 2005, however, King and Mutual entered into an agreement under which, Plaintiffs allege, Mutual agreed not to enter the market with a generic metaxalone product and to aid King in delaying entry by other competitors. But, instead of ending the 102 patent lawsuit, King and Mutual asked the court to stay the lawsuit until the FDA issued its decision on several of Kings petitions asking the FDA essentially not to approve ANDA applications for metaxalone products, including Mutuals. King and Mutual subsequently filed additional petitions with the FDA seeking, as the Plaintiffs alleged, to delay the approval, and thus the entry, of generic metaxalone products. In 2008, King and Mutual brought a patent infringement suit against Sandoz, a generic manufacturer, on another metaxalone-related patent, the 566 patent. The Plaintiffs alleged that the 102 patent lawsuit, the Defendants petitions to the FDA, and the 566 patent lawsuit were all part of the Defendants anticompetitive scheme to prevent or delay entry of generic metaxalone products. The Plaintiffs alleged that the sham exception to NoerrPennington immunity applied because the lawsuits and petitions were objectively baseless and the Defendants acted in bad faith in bringing or maintaining the lawsuits and petitions. The Court first determined that the Plaintiffs alleged sufficient facts to support their claim that the 102 patent litigation was objectively baseless that no litigant would believe the suit is

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reasonably calculated to elicit a favorable outcome. In addition to other factual allegations, the Court noted that the allegation that the Defendants continued the litigation even after signing an agreement relating to marketing a generic metaxalone product plausibly alleged the litigation was a sham. The Court also used this fact to reach its finding that Plaintiffs plausibly alleged that the Defendants acted in bad faith by continuing the 102 patent litigation, even though there was no justiciable controversy after entering into their agreement, thus meeting the second prong of the sham exception. With regard to the 566 patent litigation, Defendants only challenged the second prong of the sham exception. The Court found that the Plaintiffs alleged sufficient facts that the Defendants used the 566 patent litigation against Sandoz merely to try to delay Sandozs entry into the market. The Plaintiffs had alleged that the litigation was part of the Defendants larger anticompetitive scheme to prevent competition from generic products and Defendants were aware that the litigation process could be used as a tool for delay. Namely, Plaintiffs alleged that Defendants sought to enjoin Sandozs launch after Sandoz received its FDA approval. Finally, the Court addressed the Defendants petitions to the FDA. The Defendants first argued that the sham exception to Noerr-Pennington immunity did not apply to the petitions filed with the FDA regarding ANDA applications. The Court acknowledged that there was no Supreme Court or Sixth Circuit precedent on this issue but followed other courts in holding that the sham exception does apply to an FDA petition. After concluding that the sham exception could apply, the Court held that the Plaintiffs plausibly alleged facts to demonstrate the petitions were objectively baseless and filed in bad faith. In particular, the Court noted that Mutual had filed a petition for the FDA to reconsider a decision allowing the marketing of generic metaxalone, but this petition would have been against Mutuals interest had it actually been pursuing approval of its ANDA application. Plaintiffs also alleged that the Defendants had filed at least five more petitions that failed to include clinical studies, which is the type of information the FDA generally relies upon. Thus, Plaintiffs claimed that the petitions were merely a sham designed to delay entry. The Court agreed that the Plaintiffs alleged sufficient facts to support their claim that the sham exception should apply.

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