AstraZeneca obtained a patent for Prilosec in 1981 and it expired in October of 2001. In June 2003, the FDA approved an over the counter (“OTC”) version of Prilosec, granting AstraZeneca “exclusivity in that market through June 2006.” In addition, AstraZeneca owns a patent for Nexium, a drug similar to Prilosec in both chemical make up and purpose. The FDA approved Nexium for sale in February 2001, eight months before the Prilosec patent expired. The Nexium patent does not expire until 2014, meaning generic substitutions cannot be made until that time. In February 2001, AstraZeneca changed its marketing plan to cease promotion for Prilosec and began aggressively pushing Nexium to doctors.
Walgreen’s complaints are that AstraZeneca switched, or attempted to switch, the market from Prilosec, which now has generic competition, to a virtually identical drug, Nexium, which has no generic competition. Walgreen asserted that there is almost no difference between Nexium and Prilosec, and that “this switching is exclusionary and violates §2 of the Sherman Act.” In addition, Walgreen argued that AstraZeneca engaged in prohibited exclusionary conduct when it introduced Prilosec OTC and obtained an FDA grant of exclusivity for three years.
The District Court began by distinguishing this case from other cases on which Walgreen relied for precedent. The difference between was that elimination of choice was a critical factor. The Court pointed out that in this case, there was no allegation that AstraZeneca eliminated any consumer choices; rather, it added choices to the market by introducing Prilosec OTC and Nexium.
The Court also pointed out that no antitrust law requires a new product to be superior to existing products. New products are not capable of affecting competitors’ market share unless consumers prefer the new product, regardless of whether that product is superior, equivalent, or inferior to the existing products.
The District Court stressed that Walgreen failed to identify an antitrust injury. Walgreen did not allege facts showing that AstraZeneca interfered with its freedom to compete. Introducing new products to the market, which allows more choices to the consumer, is not a violation of §2 of the Sherman Act. Therefore, the Court granted AstraZeneca’s motion to dismiss all five complaints for failure to state a claim.
Judge(s): Richard W. Roberts
Related Categories: Civil Procedure , Health Care
|Plaintiff Lawyer(s)||Plaintiff Law Firm(s)|
|Richard Arnold||Kenny Nachwalter PA|
|Robert Landon, III.||Kenny Nachwalter PA|
|Scott Perwin||Kenny Nachwalter PA|
|Lauren Ravkind||Kenny Nachwalter PA|
|Linda P. Nussbaum||Keplan Fox & Kilsheimer LLP|
|Defendant Lawyer(s)||Defendant Law Firm(s)|
|Joshua E. Anderson||Sidley Austin LLP|
|Alycia A. Degen||Sidley Austin LLP|
|Mark Haddad||Sidley Austin LLP|
|Kristin Graham Koehler||Sidley Austin LLP|
|David Schiffman||Sidley Austin LLP|
|John W. Treece||Sidley Austin LLP|