Dr. Reddy's Laboratories successfully defends against allegations of "pay for delay" in multidistrict antitrust class action litigation

Client(s) Dr. Reddy's Laboratories, Ltd. and Dr. Reddy's Laboratories, Inc.

Jones Day represented Dr. Reddy's Laboratories, Ltd. and Dr. Reddy's Laboratories, Inc. in a multidistrict class action litigation. Direct and indirect purchasers of the drug Nexium brought this antitrust litigation against the manufacturer of Nexium and three manufacturers (including Dr. Reddy's) who had announced intentions to sell generic versions of Nexium. The plaintiffs alleged that these manufacturers entered into unlawful "pay-for-delay" agreements, allegedly in violation of the Sherman Act, when the manufacturers entered into various settlement agreements resolving Hatch-Waxman patent litigation. This Nexium antitrust litigation was the first so-called "pay-for-delay" case to go to trial following the Supreme Court's decision in Federal Trade Commission v. Actavis.

On summary judgment, the Court dismissed most of the claims against Dr. Reddy’s but permitted one claim: that Dr. Reddy’s had conspired with two other generic manufacturers and AstraZeneca to keep a generic version of Nexium off the market. Immediately before trial, Dr. Reddy’s settled with the plaintiffs (subject to court approval). The settlements call for dismissal of all claims against Dr. Reddy's. Dr. Reddy's pays no money to the plaintiff classes. Although there is a cooperation agreement, Dr. Reddy's continues to deny liability or wrongdoing, and plaintiffs chose not to call any DRL witnesses to testify.

In re Nexium (Esomeprazole) Antitrust Litigation, MDL No. 2409 (D. Mass.)