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Ninth Circuit: Sufficient evidence of fraud to defeat summary judgment on Walker Process claim

By McKee, Voorhees & Sease, P.L.C.

In a recent decision, the Ninth Circuit addressed the antitrust implications of so-called "reverse payments" between brand name and generic pharmaceutical companies.  A health care provider brought suit against the two companies, alleging their agreement to delay the introduction of a generic pharmaceutical (which involved payment to the generic manufacturer of $4.5 million per month) was a violation of antitrust laws that caused the provider to have to pay substantially more to obtain the pharmaceutical.  The provider also alleged the brand name pharmaceutical company filed for and obtained patents it knew were invalid and engaged in sham litigation to unlawfully extend its patent monopoly over the pharmaceutical.  The provider lost on both counts at the district court.  A jury found the agreement between the two providers had not caused a delay in the introduction of the generic, and the district court granted summary judgment on the attempted monopolization claim based on fraudulent filings.

The Ninth Circuit affirmed and reversed in part.  The court affirmed the jury's verdict on the unlawful restraint of trade (§ 1 of the Sherman Act) claim, holding the district court's evidentiary decisions were not an abuse of discretion.  As to the summary judgment on the monopolization claim under § 2, the court agreed there was insufficient evidence that the brand-name manufacturer's litigation to prevent the introduction of the generic was a sham.  But, the Ninth Circuit held there was sufficient evidence to overcome summary judgment that one of the patents asserted in those cases was obtained by fraud, and remanded the case for further consideration of the § 2 claim under Walker Process.

More on Kaiser Found. Health Plan, Inc. v. Abbot Labs., Inc. after the jump.

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Full post as published by FileWrapper on March 27, 2009 (boomark / email).