United States: Antitrust: Second Circuit Addresses Presumption Of Causation And Partially Revives Actos Lawsuit

Last month, the Second Circuit partially revived state law antitrust claims brought by purchasers of the diabetes drug Actos who alleged that its manufacturer, Takeda Pharmaceuticals Co. Ltd., unlawfully delayed generic competition. The plaintiffs originally claimed that false statements made by Takeda to the Food and Drug Administration (FDA) about two patents created a bottleneck that delayed competitors from selling generic versions of Actos, ultimately causing the plaintiffs to pay higher prices for Actos. In September 2015, S.D.N.Y. Judge Ronnie Abrams dismissed the claims, holding that the plaintiff buyers had not plausibly shown that Takeda's actions delayed entry of generic versions of Actos into the market.

In a decision penned by Judge Jed S. Rakoff, sitting by designation, the Second Circuit overturned the dismissal of certain claims. It agreed that the plaintiffs had not sufficiently shown that Takeda delayed market entry for nine generic competitors because the plaintiffs had not plausibly alleged that the generics were aware of Takeda's false statements to the FDA. However, the three-judge panel disagreed with the lower court's decision with respect to a potential generic product from Teva Pharmaceuticals Industries Ltd., which used a different method to seek regulatory approval and was told by the FDA that it should have taken a delayed route based on Takeda's patent descriptions. Because the plaintiffs' theory of causation "as to Teva [did] not require any knowledge of the false patent descriptions . . . [the Second Circuit found] that plaintiffs [had] plausibly alleged that Takeda delayed Teva's market entry."

This decision clarifies that an antitrust plaintiff "may be entitled to a presumption of causation" where "dismissal at [an] early stage on the basis of speculation about possible and not inherently more plausible alternative causes would be premature."

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