Value Drug Company v. Takeda Pharmaceuticals USA Inc., et al.

Analysis Group was retained on behalf of members of the joint defense group in an antitrust class action brought by Value Drug Company, a pharmaceutical wholesaler and a purchaser of colchicine, a treatment for gout. Value Drug alleged that the plaintiffs, manufacturers of branded and generic pharmaceuticals, conspired to restrain trade by delaying the entry of generic colchicine to the market, thus forcing consumers to pay supracompetitive prices. Value Drug sought to certify a class of 49 purchasers of branded and generic colchicine.

An Analysis Group team led by Managing Principals Stephen Fink and Ted Davis, Vice President Carletta Wong, and Managers Filippo BalestrieriIgor Karagodsky, and Benjamin March supported Senior Advisor Bruce Strombom, who filed three expert reports on class certification and damages issues and testified at both deposition and a pretrial hearing on class certification. Dr. Strombom opined that the opposing expert’s “but for” analysis was flawed because it relied on unsupported economic assumptions and averages that masked important variations in the individualized prices and purchases negotiated between the drug manufacturers and the direct purchasers. The analysis was therefore insufficient to satisfy Federal Rule of Civil Procedure 23’s predominance requirement because it could not show antitrust impact across all similarly situated colchicine purchasers. Dr. Strombom also opined on the economic incentives of the proposed class members to pursue litigation by means other than a class action.

A judge in the US District Court for the Eastern District of Pennsylvania denied Value Drug’s motion for class certification. Citing Dr. Strombom’s submission in his opinion, the judge explained that the court could not assume facts to support a theory, as proposed by Value Drug’s expert, and held that the plaintiff “did not adduce the evidence allowing us to find its theory of antitrust impact is plausible.”

The district court allowed the plaintiff to renew its motion for class certification to address deficiencies identified in its initial motion. After a subsequent hearing, the court, again referring to Dr. Strombom’s submissions, denied certification a second time, holding that the plaintiff “has not adduced an evidentiary basis for us to find the impracticability of joinder required for class certification.”

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