In Re: Opana ER Antitrust Litigation

Filing 725

MEMORANDUM Opinion and Order: For the reasons stated herein, the Court rules as follows: 1.Defendants' Daubert motions to exclude Ms. DeLeon (Dkt. No. 513), Mr. Molina (Dkt. No. 516), and Dr. Rosenthal (Dkt. No. 545) are granted. 2. Defendants' Daubert motions to exclude Dr. Leitzinger (Dkt. No. 529) and Dr. Leffler (Dkt. No. 552) are granted in part and denied in part. 3. All of Defendants' other Daubert motions (Dkt. No. 510, Dkt. No. 537, Dkt. No. 541, Dkt. No. 546, Dkt. No. 550, Dkt. No. 556) are denied. 4.Plaintiffs' motions to exclude Dr. Patel (Dkt. No. 519), Mr. Figg (Dkt. No. 521), Dr. Fassihi (Dkt. No. 524), Dr. Green (Dkt. No. 527), and Dr. Berneman (Dkt. No. 528) are granted. 5. Defendants' Daubert motions to exclude Dr. Addanki (Dkt. No. 526) and Mr. Singer (Dkt. No. 520) are granted in part and denied in part. 6.All of Plaintiffs' other Daubert motions (Dkt. No. 522, Dkt. No. 525, Dkt. No. 523) are denied. 7.Defendants' motion for summary judgment as to the state claims is granted but denied as to all other claims in Defendants' summary judgment motions. (Dkt. No. 532, Dkt. No. 539). Signed by the Honorable Harry D. Leinenweber on 6/4/2021: Mailed notice (maf)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

In Re: OPANA ER ANTITRUST
LITIGATION

MDL No. 2580
Case No 14 C 10150

This Document Relates to All
Cases

Judge Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER
This is a case involving patents for prescription opioids and
alleged violations antitrust law through intellectual property
licenses and lawsuit settlements. Broadly speaking, three groups
of plaintiffs bring this case: the “End Payor” Plaintiffs, who
consist of health insurance companies and trust funds, the “Direct
Purchaser” Plaintiffs, who consist of drug distribution companies,
and the “Retailer” Plaintiffs, who sell medicines to the general
populace.

(Pl.’s

Resp.

to

Def.’s

Stmt.

of

Facts

on

Damages/Causation (“PSOF-DC”) ¶¶ 1–3, Pl’s Stmt. of Facts on
Damages/Causation, Ex. 1, Dkt. No. 618-1.) Defendants are patent
holders Endo Pharmaceuticals, Endo Health Solutions, Inc., and its
acquired

subsidiary

Penwest

Pharmaceuticals

Co.,

(together,

“Endo”) as well as the patent licensee Impax Pharmaceuticals. (Id.
¶¶

4–5.)

Defendants

argue

that

they

are

entitled

to

summary

judgment because Plaintiffs have failed to show there was an

antitrust injury or that damages resulted from the putative injury.
(Dkt. No. 539.) In the alternative, Defendants filed a second
summary judgment motion to argue that they are, at a minimum,
entitled to summary judgment on various patent issues. (Dkt. No.
532.)

Integral

to

both

summary

judgment

arguments

and

in

anticipation of trial, the parties have also filed twenty-one
Daubert motions. (Dkt. Nos. 510, 513, 516, 519, 520, 521, 522,
523, 524, 525, 526, 527, 528, 529, 537, 541, 545, 546, 550, 552,
556.) For the reasons set forth below, the Court first resolves
the Daubert motions and then denies Defendants’ motions for summary
judgment in part.
I.

BACKGROUND

Oxymorphone has been available as a prescription opioid in
the U.S. market since the 1960s. (“Regulatory History of Opana ER”
at 5, Mem. on Causation/Damages, Ex. 4, Dkt. No 558-19.) Starting
in

the

early

2000s,

Endo

Pharmaceutical

Holdings

developed,

patented, and sold an oxymorphone medication that allowed patients
to take a single large dose of medication and relieve pain over a
longer duration, in other words an “extended release” oxymorphone,
referred to throughout this opinion as “Opana ER” or “oxymorphone
ER.” (Id. at 6–7.) Opana ER was officially approved by the U.S.
Food & Drug Administration in 2006. (Id.)
Oxymorphone ER was originally protected with one patent which
expired on February 29, 2008. See U.S. FOOD & DRUG ADMIN., APPROVED
- 2 -

DRUG PRODS.

WITH

THERAPEUTIC EQUIV. EVALS.

6-333

(41st

To

https://www.fda.gov/media/71474/download.

ed.

manage

2021)

patented

drugs and their approved substitutions, the FDA issues a yearly
publication called the Approved Drug Products with Therapeutic
Equivalence Evaluations, usually referred to as the “Orange Book.”
Id. at iv. As is pertinent to this litigation, the Orange Book
identifies drug products approved by the FDA under the Federal
Food, Drug and Cosmetic Act as well as patent and exclusivity
information related to approved drug products. Id. at iv–vi.
In June 2007, Impax filed an Abbreviated New Drug Application
(“ANDA”)

with

the

Causation/Damages,

FDA.
Ex.

(Pretrial
5,

Dkt.

Stipulation

No.

558-24.)

¶ 15,
The

Mem.

on

abbreviated

application process was created by the Hatch-Waxman Act of 1984,
enacted to encourage the entry of generic drugs into the U.S.
market. KEVIN J. HICKEY, CONG. RSCH. SERV., R45666, DRUG PRICING
PROP.

L.

AND

20

INTELL.
(2019)

https://crsreports.congress.gov/product/pdf/R/R45666. The HatchWaxman

Act

application,

allows

generic

relying

on

drug

data

entrants

and

results

to

file

from

a

the

shorter
original

applicant, and gives temporary secondary exclusivity on the market
to

the

first

generic

drug

producer

to

file.

Id.

at

25.

Specifically, the first successful applicant has exclusive right
to sell the generic drug, apart from the patent holder, for up to
180 days after going on the market. Id. Once the FDA approves the
- 3 -

abbreviated application, the generic drug producer is required to
notify the original patent holders of their intention to produce
a generic drug. The patent holders must challenge this action in
court to prevent production and sale. (PSOF-DC ¶ 15.)
In the October 2007 Orange Book, Endo asserted for the first
time U.S. Patent No. 7,276,250 (“the ‘250 patent”), and recently
acquired

U.S.

Patent

5,958,456

(“the

‘456

(Pretrial

Stipulation

Nos.

5,662,933

patent”)

in

(“the

‘933

connection

¶¶ 4,5,11,12.)

These

patent”)

with

Opana

additional

and
ER.

patents

pertained to the controlled release mechanism of drug dosages, and
the latest of these added patents expired in September 2013. (Pl.’s
Resp. to Def.’s Stmt. of Facts on Patent Issues (“PSOF-PI”) ¶ 6,
Opp’n, Ex. 2, Dkt. No. 615-2.) In response to Endo’s new patent
claims, Impax amended its ANDA to certify that these new patents
were “invalid, unenforceable, or will not be infringed upon by the
manufacture, use or sale of Impax’s generic Original Opana ER
product.” (Id. ¶ 9.) On November 15, 2007, Endo subsequently filed
a suit for patent infringement based on the acquired ‘933 and ‘456
patents (the “underlying litigation patents”). (Joint Stipulation
¶ 18.)
Throughout the course of the 2007 patent litigation, Endo and
Impax discussed resolving the case through settlement. Ultimately,
Endo rejected each of Impax’s proposals, including a July 2011
proposal. (Def.’s Resp. to Pl’s Stmt. Of Facts on Damages/Causation
- 4 -

(“DSOF-DC”) ¶ 19, Dkt. No. 693. (“Impax’s proposed July 2011 entry
date ‘was shut down very quickly.’”) (citing Snowden Dep. 147:7–
148:9, DSOF-DC, Ex. 66, Dkt. No. 676-10).) Meanwhile, Endo sued
and subsequently settled its lawsuit with Actavis, Inc., another
ANDA first filer, albeit on the less popular dosage strengths of
Opana ER. (DSOF-DC ¶ 24.) The settlement between Actavis, Inc. and
Endo resulted in a July 15, 2011, start date for Actavis’ generic
Opana ER sales. (Id.)
Approximately

one

month

before

trial,

Impax

received

tentative approval from the FDA to produce its dosages of generic
Opana ER. (PSOF-PI ¶14.) At that time, Endo reinitiated settlement
talks with Impax, and the parties eventually settled five days
into the patent trial on June 8, 2010. (DSOF-DC ¶ 1.) The parties
signed two documents on that date. (Id.)
The parties first signed the official settlement between Endo
and Impax on the patent infringement litigation, entitled the 2010
Settlement and License Agreement (“2010 SLA”). (2010 SLA at 22–
24, Mem. on Patent Issues, Ex. 17, Dkt. No. 535-19.) The 2010 SLA
contained five notable provisions. First, Impax agreed to delay
the sales of generic Opana ER until, at the latest, January 1,
2013. (Id. at 2–3.) Second, Endo agreed to grant Impax a broad
license to sell generic Opana ER against both current and future
patents, referred to as the “Broad License” provision. (Id. at 10–
12.) Third, Endo agreed it would not launch its own competing
- 5 -

generic version of Opana ER for at least six months after Impax’s
generic launch, meaning that Impax would be the only generic on
the market during the secondary exclusivity period granted through
the Hatch-Waxman Act. (Id. at 11.) This is referred to as the “No
Authorized Generic” provision. The fourth and fifth important
provisions constitute related compensation formulas based on the
future 2013 market for generic Opana ER. (Id. at 13.) Essentially,
if the market for generic Opana ER was still strong when Impax
launched, then Impax would pay Endo a portion of its revenue. (Id.)
This is the “Impax Royalty” provision. Conversely, if the market
was weak, as might happen if Endo cannibalized the market with an
upgraded Opana ER product in the intervening years, Endo would
have to pay Impax. (Id.) This is referred to as the “Endo Credit”
provision. The central dispute of this litigation is whether these
provisions

of

the

2010

SLA

violated

antitrust

law

as

an

unreasonable restraint on trade.
The second agreement signed that day was a document forming
a joint venture between Endo and Impax to develop a Parkinson’s
disease treatment. (DSOF-DC ¶ 5.) Endo was provided with future
“profit-sharing rights,” and Impax was provided with an upfront
payment of ten million dollars. (Id. ¶ 2.) At summary judgment,
the parties dispute whether the ten-million-dollar payment is an
unrelated negotiation term or a sham venture created to provide an
upfront payment to Impax. (Id.)
- 6 -

Approximately one month after the 2010 Settlement and License
Agreement was signed, Endo submitted a New Drug Application with
the FDA for a reformulated version of Opana ER. The “reformulated
Opana ER” was crush-resistant and designed to curb the welldocumented crushing and snorting abuse of opioid drugs. (PSOF-PI
¶4.) This information was made public when the reformulated Opana
ER was approved by the FDA in December 2011. Reformulated Opana ER
went on the market in March 2012. (Id.) During the next year, Endo
filed multiple citizen petitions with the FDA asking the FDA to
find the original Opana ER unsafe. (PSOF ¶ 55.) Had Endo been
successful, the FDA would have revoked its approval of the generic
versions of Opana ER. (Id.) The FDA declined to do so.
As a result, Impax launched its generic original Opana ER per
the terms of the 2010 SLA between the parties in January 2013.
(PSOF-DC ¶ 34.) Because the market for the original Opana ER had
been drastically reduced through the launch of the reformulated
Opana

ER,

Endo

paid

Impax

the

“Endo

Credit,”

which

was

approximately $102 million. (DSOF-DC ¶ 4.)
Endo also worked to acquire additional patents to protect
Opana ER from infringement. In late 2012, Endo acquired U.S. Patent
No. 8,309,122 (the ‘122 patent) and 8,329,216 (the ‘216 patent).
(PSOF-PI ¶ 34.)
Endo then aggressively enforced the ‘122 and ‘216 patents
against the many generic drug producers who had filed either
- 7 -

original or reformulated Opana ER ANDAs with the FDA. (PSOF-PI
¶ 35.) One of these lawsuits ended with a settlement agreement
where

Endo

became

the

exclusive

licensee

of

U.S.

Patent

No. 8,871,779 (the ‘779 patent) (with the ‘122 and ‘216 patents,
the “later acquired patents”). (Id. ¶¶ 34, 37 n.11.) As the last
of the extended release oxymorphone patents, the ‘779 patent does
not expire until 2029. (Id. ¶ 34.) Once Endo became licensee of
the

‘779

patent,

Endo

also

sued

generic

drug

producers

for

infringement on this patent as well. (Id. ¶ 44.)
In sum, Endo sued eleven additional generic drug producers
over original and reformulated Opana ER infringement on the later
acquired patents. (Id. ¶ 35.) Following two separate district
circuit court decisions and one federal circuit affirmation, all
other generic Opana ER producers other than Impax were enjoined
from selling generic Opana ER based on the later acquired patents.
(PSOF ¶¶ 41–43, 49–51.)
Even though Impax had the Broad License, Endo also sued Impax
in a separate contention regarding the later acquired patents.
Compl. ¶ 1, Endo Pharmaceuticals Inc. v. Impax Laboratories, Inc.,
No. 16-CV-2526 (D.N.J. May 4, 2016). In its complaint, Endo alleged
that the 2010 SLA’s Broad License included a requirement by Impax
to enter good faith negotiations to provide Endo with a percentage
of the profits. Id. The parties settled their dispute with an
agreement for Impax to pay Endo three million dollars immediately
- 8 -

and 50% of the profits thereafter. (2017 Settlement Agreement at
3, 15, App’x of Exs., Ex. 75, Dkt. No. 620-20.) In return, Endo
authorized Impax to be the exclusive producer of generic Opana ER.
(Id.)
In

June

2017,

the

FDA

requested

that

Endo

withdraw

reformulated Opana ER “based on its concern that the benefits of
the drug may no longer outweigh its risks due to the public health
consequences of abuse.” Notice, 85 FED. REG. 247 (Dec. 23, 2020).
As a result, Impax’s generic Opana ER is the only extended release
oxymorphone product currently on the market.
This multidistrict litigation began with the December 12,
2014, transfer order from the United States Judicial Panel on
Multidistrict Litigation (Dkt. No. 1.) Upon Defendants’ motion to
dismiss, on February 10, 2015, the Court dismissed all state
consumer protection and unjust enrichment claims and allowed the
antitrust claims to proceed. (Dkt. No. 151.) On March 2, 2016, the
End Payor Plaintiffs filed a Second Consolidated Amended Class
Action Compliant. (Dkt. No. 164.) On August 11, 2016, the Court
dismissed some, but not all, of the state unjust enrichment and
consumer protection claims. (Dkt. No. 210.)
The parties then entered extensive, multi-year discovery. At
the close of discovery, the parties filed 25 motions. Defendants
filed two motions for summary judgment and eleven Daubert motions.
The Direct Purchaser Plaintiffs and End Payor Plaintiffs each filed
- 9 -

motions for class certification and ten Daubert motions. The Court
resolves the Daubert motions and the summary judgment motions in
this opinion and order.
II.

STANDARD

Summary judgement is proper “only where the moving party is
entitled to judgment as a matter of law, where it is quite clear
what the truth is, and where no genuine issue remains for trial.”
Lupia v. Stella D’Oro Biscuit Co., 586 F.2d 1163, 1166 (7th Cir.
1978) (quoting Poller v. Columbia Broadcasting System, Inc., 368
U.S. 464, 467 (1961)). There is a genuine issue of material fact
when “there is sufficient evidence favoring the nonmoving party
for a jury to return a verdict for that party.” See Harney v.
Speedway SuperAmerica, LLC, 526 F.3d 1099, 1104 (7th Cir. 2008)
(citation omitted). The Court construes all facts and reasonable
inferences in favor of the plaintiffs. Id. For the nonmoving party
to prevail, it must show a genuine dispute of facts that might
affect the outcome at trial; “[i]rrelevant or unnecessary facts do
not deter summary judgment, even when in dispute.” Id. (citation
omitted).
“Any

assessment

of

the

admissibility

of

expert

witness

testimony begins with Federal Rule of Evidence 702 and the Supreme
Court’s

opinion

in

Daubert,

as

together

they

govern

the

admissibility of expert witness testimony.” Krik v. Exxon Mobil

- 10 -

Corp., 870 F.3d 669, 673 (7th Cir. 2017); see also Daubert v.
Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). Under Rule 702:
A witness who is qualified as an expert by knowledge,
skill, experience, training, or education may testify in
the form of an opinion or otherwise if:
(a) the expert’s scientific, technical, or other
specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in issue;
data;

(b) the testimony is based on sufficient facts or

(c) the testimony is
principles and methods; and

the

product

of

reliable

(d) the expert has reliably applied the principles
and methods to the facts of the case.
FED. R. EVID. 702. “In Daubert, the Supreme Court interpreted
Rule 702 to require ‘the district court to act as an evidentiary
gatekeeper, ensuring that an expert’s testimony rests on a reliable
foundation and is relevant to the task at hand.’” Gopalratnam v.
Hewlett-Packard Co., 877 F.3d 771, 778 (7th Cir. 2017) (quoting
Krik, 870 F.3d at 674).
To screen proposed expert testimony, a district court must
answer three questions: “whether the witness is qualified; whether
the expert’s methodology is scientifically reliable; and whether
the testimony will assist the trier of fact to understand the
evidence or to determine a fact in issue.” Id. at 779 (citations
omitted). To evaluate the reliability of an expert’s scientific
methodology, Daubert offers the following factors for case-by-case
- 11 -

consideration: whether the methodology can be tested, whether it
has been subject to peer review, what the known or potential rate
of

error

is

and

whether

there

are

standards

controlling

the

technique’s operation, and whether there is general acceptance of
the technique in the relevant scientific community. Daubert, 509
U.S. at 594. This list is neither exhaustive nor mandatory. Kumho
Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 150 (1999).
The Court’s “‘gatekeeping’ obligation . . . applies not only
to testimony based on ‘scientific’ knowledge, but also to testimony
based on ‘technical’ and ‘other specialized’ knowledge.” Kumho,
526 U.S. at 141. The court must adjust the Daubert factors “to fit
the facts of the particular case at issue, with the goal of testing
the reliability of the expert opinion” because “the reliability of
different kinds of expertise may be shown in different ways.”
United States v. Brumley, 217 F.3d 905, 911–12 (7th Cir. 2000).
Where an expert’s testimony is based on extensive experience, the
court determines the extent and type of experience and may limit
both the questioning and the testimony to reflect only those areas
in which the expert has extensive experience and training. Id. at
911. Nevertheless, “[t]alking off the cuff — deploying neither
data nor analysis — is not an acceptable methodology.” Lang v.
Kohl’s Food Stores, Inc., 217 F.3d 919, 924 (7th Cir. 2000).
Ultimately, the court’s gatekeeper role does not replace the role
of the trier of fact, and the “jury must still be allowed to play
- 12 -

its essential role as the arbiter of the weight and credibility of
expert testimony.” Stollings v. Ryobi Techs., Inc., 725 F.3d 753,
765 (7th Cir. 2013).
III.
The

Court

notes

at

DISCUSSION
the

outset

that

few

experts

were

challenged on the basis of insufficient credentials or that the
experts do not qualify as experts in their fields. As a result,
the Court focuses on the second and third prongs, the methodology
of the expert and the expert opinion’s relevance for the trier of
fact,

unless

specifically

noted

otherwise

in

the

subsequent

challenges to the proffered experts.
A.

Defendants’ Daubert Motions

1. Defendants move to exclude the
testimony of John R. Tupman, Jr. (Dkt. No. 510)
Defendants first move to exclude fully the opinion of John R.
Tupman

Jr.

Plaintiffs

have

retained

Mr.

Tupman,

a

former

pharmaceutical executive from Eli Lilly and Co., to give the
opinion

that

position”

“no

would

reasonable
have

pharmaceutical

entered

the

side

company

agreement

in

Endo’s

regarding

Parkinson’s Disease, which was executed by Endo and Impax on the
same day as the Opana ER Settlement agreement. (Tupman Rep. ¶¶ 1–
3, Mem., Ex. 2, Dkt. No. 512-3.) In support of his opinion, Mr.
Tupman identifies the lack of due diligence and contract terms
that favor Impax from a risk-sharing perspective. Plaintiffs hope
- 13 -

to use Mr. Tupman’s testimony to argue that the Parkinson’s Disease
joint venture was a sham, and that the payment should be considered
a reverse payment and part of the settlement between Impax and
Endo’s Opana ER patent lawsuit. As held in F.T.C. v. Actavis, Inc.,
570 U.S. 136 (2013), a reverse payment can indicate that a patent
infringement

lawsuit

settlement

was

an

unlawful

restraint

on

opinion

is

trade.
Defendants

argue

the

Mr.

Tupman’s

expert

deficient in two ways. The first argument is that, under Actavis,
the trier of fact must determine whether the agreement represents
a “fair value for services” rendered. Id. at 156. Because Mr.
Tupman’s opinion relates to the reasonableness of Endo’s actions,
it does not assist the trier of fact to determine whether the ten
million dollars paid was a fair value for the promised development
of the Parkinson’s Disease research. Second, Defendants argue that
there is no methodology employed by Mr. Tupman when making the
determination that Endo was being atypical and unreasonable.
In

response,

Plaintiffs

argue

that

Defendants,

not

Plaintiffs, have a burden to show the procompetitive rationale for
the restraint. Under the rule of reason test, Plaintiffs have the
burden to show that the agreements between the parties was an
unreasonable restraint of trade, which Mr. Tupman provides through
his testimony. In response to the second argument, Plaintiffs argue

- 14 -

that Mr. Tupman’s expertise is one of experience, not scientific
analysis.
The Court finds neither of Defendants’ arguments persuasive.
Plaintiffs have the burden to show that the putative reasons set
forth in the joint agreement between Endo and Impax are less
plausible than Plaintiffs’ alternative theory of a sham contract
and secret settlement. By opining that Endo acted in an unusual
and financially detrimental manner, Mr. Tupman’s evidence makes
Plaintiffs’

theory

more

plausible

and

thus

relevant

to

the

litigation. The Court’s review of Mr. Tupman’s testimony shows
that Mr. Tupman first articulates a standard process for engaging
in pharmaceutical partnerships and then analyzes how Endo deviated
from

this

process.

As

a

result,

Mr.

Tupman’s

methodology

is

reliable under Daubert. See Walker v. Soo Line R. Co., 208 F.3d
581, 591 (7th Cir. 2000) (“Rule 702 specifically contemplates the
admission of testimony by experts whose knowledge is based on
experience.”) “Whether a payment was large and unjustified . . .
requires viewing the payment in the context of the facts of the
case, which may include business considerations that are less
tangible

or

Hydrochloride)

quantifiable.”
Antitrust

In

Litig.,

re
No.

CV

Solodyn

(Minocycline

14-MD-02503,

2018

WL

734655, at *4 (D. Mass. Feb. 6, 2018). Here, Defendants’ objections
go to the weight of the evidence and not its admissibility, and
the motion is denied. (Dkt. No. 510.)
- 15 -

2. Defendants move to exclude the
testimony of Janet K. DeLeon (Dkt. No. 513)
Plaintiffs have retained Janet K. DeLeon, a pharmaceutical
consultant, to provide an expert opinion on what the FDA would
have done, absent the litigation, specifically (1) when it would
have granted approval for Impax’s generic Opana ER; (2) when it
would have granted approval Actavis’ generic Opana ER; (3) whether
it would have allowed Endo to claim its reformulated version was
an improvement over the original; and (4) other regulatory hurdles,
if any, had Endo decided to launch an authorized generic. (DeLeon
Rep. ¶ 3, Mem., Ex. 4, Dkt. No. 515-5.)
Defendants move to exclude partially this testimony on three
grounds. First, Defendants argued that Ms. DeLeon does not have
experience with the FDA on opioid products and lacks the expertise
to evaluate the impact reformulated Opana ER had on opioid abuse.
Second, Defendants argue that Ms. DeLeon does not employ any
methodology,

but

simply

repeats

facts

already

in

evidence.

Finally, Defendants argue that Ms. DeLeon’s opinion regarding
Endo’s promotion of reformulated Opana ER is a legal conclusion
and not a proper subject matter of expert opinion.
Without reaching the question of Ms. DeLeon’s expertise in
the regulatory pharmaceutical industry, the Court agrees that Ms.
DeLeon does not employ expert analysis in her proffered opinion.
Instead, DeLeon’s report highlights information that is already
- 16 -

available through documents and fact witnesses. First, as pointed
out by Plaintiffs in their opposition brief, there is already
substantial evidence in the record that the FDA declined to allow
Endo to claim that the reformulated Opana ER was superior. (Opp’n
to Mot. to Exclude DeLeon at 7, Dkt. No. 602.) Further, as stated
in

Ms.

DeLeon’s

summary

of

the

facts,

the

FDA

had

already

tentatively approved generic Opana ER and would provide final
approval after the required 30-month stay. (DeLeon Rep. ¶¶ 56–64.)
Similarly, the FDA’s approval of generic Opana ER necessarily means
that Endo was free to produce a generic version as well. These
facts are already in evidence, so it is unclear why Ms. DeLeon
would provide any additional assistance to the jury.
Plaintiffs

argue

that

courts

routinely

permit

expert

testimony to assist the jury in understanding complex regulatory
issues, citing Antrim Pharm. LLC v. Bio-Pharm, Inc., 950 F.3d 423,
430–31 (7th Cir. 2020). In Antrim, the Seventh Circuit held that
the district court did not abuse its discretion in allowing the
testimony of an FDA regulatory expert that testified about whether
or not the FDA would infer ownership when receiving an ANDA
application. Id. The Seventh Circuit, however, upheld the district
court’s decision because the jury needed to “determine a fact at
issue” about this topic, noting that the fact witness “incorrectly
stated there is ‘no difference’ between ownership of an ANDA and
ownership of an underlying product.” Id. at 431. Here, however,
- 17 -

both parties agree as to the underlying facts, and Plaintiffs have
not brought any questionable testimony before the Court that might
lead to confusion on the facts in question.
Plaintiffs’ other cases are similarly inapposite. Plaintiffs’
cited cases admitted expert testimony regarding general regulatory
processes that would assist the jury. See, e.g., Jones v. Novartis
Pharms. Corp., 235 F.Supp. 3d 1244, 1255–56 (N.D. Ala. 2017) (“The
court finds that Dr. Parisian is qualified, based on her experience
at

the

FDA

as

a

Medical

regulatory

requirements

development

of

(Drospirenone)

Officer,
for

prescription
Mktg.,

Sales

the

to

offer

testimony

testing,

drugs.”);
Practices

In
&

re

Prod.

about

marketing,
Yasmin
Liab.

&

and
YAZ

Litig.,

No. 3:09-MD-02100-DRH, 2011 WL 6302287, at *13 (S.D. Ill. Dec. 16,
2011) (“Here, the Court finds that Dr. Kessler’s testimony is
permissible because of the complex nature of the process and
procedures and the jury needs assistance understanding it.”). Ms.
DeLeon has not submitted expert testimony about how the FDA ANDA
approval

process

works

generally.

Instead,

Ms.

DeLeon’s

application of the FDA regulatory system to this case simply
recited facts already present in the record. For this reason, the
Court grants Defendants’ motion to exclude Ms. DeLeon’s testimony.
(Dkt. No. 513.)

- 18 -

3. Defendants move to exclude the
testimony of Luis A. Molina (Dkt. No. 516)
Luis A. Molina is an MBA-credited pharmaceutical consultant
with more than twenty years of experience at a large pharmaceutical
company. (Molina Rep. ¶¶ 5–6, Mem., Ex. 12, Dkt. No. 518-13.) Mr.
Molina

provides

four

opinions

in

his

report:

(1)

absent

the

settlement agreement between Endo and Impax, Endo would have been
ready and able to launch an authorized generic; (2) absent the
agreement, a rational pharmaceutical company in Endo’s position
would have launched an AG version contemporaneously with Impax’s
launch; (3) Endo’s actions were consistent with planning to launch
an authorized generic; and (4) absent the agreement, a rational
company in Endo’s position would have continued its production of
branded Opana ER and the authorized generic Opana ER, even with
the launch of the reformulated version. (Id. ¶ 43.)
Defendants object to all of Mr. Molina’s testimony, and the
Court concurs. Mr. Molina’s report does not engage in any analysis
or method, but instead reiterates the facts of the case and then
offers his opinion based entirely on his industry experience. (See,
e.g., id. ¶ 68 (“All of [the recited facts are] consistent with
and confirms my opinions that absent the no-AG promise Endo made
to Impax, Endo was ready, and, in similar circumstances a rational
pharmaceutical company would have been willing and financially

- 19 -

incentivized to launch an AG version of Opana ER contemporaneously
with an Impax generic launch.”))
While experience can qualify a person to be an expert witness,
the district court cannot simply take the witnesses’ word at face
value. See Daubert v. Merrell Dow Pharms., Inc., 43 F.3d 1311,
1319 (9th Cir. 1995) (“We’ve been presented with only the experts’
qualifications,

their

conclusions

and

their

assurances

of

reliability. Under Daubert, that’s not enough.”). “If the witness
is relying solely or primarily on experience, then the witness
must explain how that experience leads to the conclusion reached,
why that experience is a sufficient basis for the opinion, and how
that experience is reliably applied to the facts.” FED. R. EVID.
702 advisory committee note to the 2000 amendment; see also Lang,
217 F.3d at 924 (“Many times we have emphasized that experts’ work
is admissible only to the extent it is reasoned, uses the methods
of the discipline, and is founded on data.”). Mr. Molina’s expert
report is devoid of method or analysis. For this reason, the Court
grants the Defendants’ motion to suppress Mr. Molina’s testimony.
(Dkt. No. 516.)
4. Defendants move to exclude certain opinions
of Dr. Jeffery J. Leitzinger (Dkt. No. 529.)
Dr. Jeffery J. Leitzinger holds a PhD and is an economist at
a national research and consulting firm. (Leitzinger Rep. ¶ 1,
Mem., Ex. 2, Dkt. No. 531-3.) Defendants dispute three opinions
- 20 -

provided by Dr. Leitzinger: (1) his ‘Lerner index’ analysis, from
which he concludes there is proof of Endo’s market power; (2) his
analysis on the cross-price elasticity between Opana ER and other
long-acting opioids which additionally purports to show Endo’s
market power; and (3) a damages model based on sales which were
unlawful based on the subsequently-acquired patents in this case.
(Id. ¶¶ 51–53, 79–85, 87–116.) The Court reviews each in turn.
First, Defendants object to Dr. Leitzinger’s employment of an
economic method of calculating excess profit called the ‘Lerner
index.’ A first principle of economics is that, in a perfectly
competitive market, firms will be making almost no economic profit
because each firm sells their goods at the cost it takes to make
the additional unit. The additional-unit cost is referred to as
marginal cost. The Lerner index is employed by economists to
calculate the economic profits beyond marginal cost. In theory, a
firm that attempts to set its prices above marginal cost would be
subject to plummeting demand as consumers switched to competing
substitutes. As a result, any excess economic profits that a firm
makes on a per-unit basis demonstrates imperfect competition,
i.e., constitutes evidence that the firm has enough power in the
relevant market to set its prices above the competitive level
without consequence.
A

firm’s

Lerner

index

is

calculated

using

two

inputs.

Economists take the retail price of the good or service sold,
- 21 -

subtract out the marginal cost that it took to provide the good or
service, and then divide the resulting number by the price sold.
This is notated as (Price – Marginal Cost/Price) or P-MC/P = X. In
practice, this number, noted as either a decimal or a percentage,
will vary based on the type of product sold. For example, a product
with low marginal cost, such as a software download to an enduser, could have a number closer to 1 (or closer to 100%). A
company that provided extremely costly goods or services, such as
a made-to-measure suit, would be expected to have a much lower
ratio, or a number closer to 0 (or closer to 0%). Generally, a
Lerner index score closer to 1 indicates strong market power. Dr.
Leitzinger opines that Endo’s Lerner index, estimated between 60.7
and 74.3 percent, is direct evidence of Endo’s monopoly power.
(Id. ¶¶ 51–53.) Defendants object, arguing the Lerner index is not
a reliable method of calculating monopoly power in many industries
with high initial costs, including the pharmaceutical industry.
In support of his assertion, Dr. Leitzinger cites to the
textbook Modern Industrial Organization by Carlton and Perloff, as
well as the Department of Justice Merger Guidelines. While the DOJ
Guidelines are developed in a different context, the manual uses
the same basic principles of economics outlined above. In the event
of

a

proposed

merger,

the

DOJ

“employ[s]

the

hypothetical

monopolist test to evaluate whether groups of products in candidate
markets are sufficiently broad to constitute relevant antitrust
- 22 -

markets.” Horizontal Merger Guidelines § 4.1.1, (U.S. Dep’t of
Justice & Fed. Trade Comm’n 2010). The DOJ evaluates whether
products sold by the merging firms are (1) in the same market and
(2) could, in the event of the merger, support a small but
significant and non-transitory increase in price of at least 5%
(“SSNIP”). Id. That small increase would have no effect on the
cost it took to produce the good; it would be essentially profit,
and thus show up as an .05 increase in a Learner index calculation.
Dr.

Leitzinger

admits

in

his

report

using

the

Merger

Guidelines to suggest an absolute Lerner index score of .05 (or
5%) as a standard for monopoly power would be “prone to false
indications of monopoly power.” (Id. ¶52.) Unlike in a potential
merger,

Plaintiffs

do

not

have

a

putative

“before

patent”

oxymorphone ER market with which to compare their current economic
profits,

and

thus

Dr.

Leitzinger’s

calculations

cannot

show

increases. However, in principle, if a 5% increase in economic
profit suggests market power, then a 60-70% calculation of absolute
economic profit is an accurate indicator of general market power.
In

their

opposition,

Defendants

argue

that

many

goods,

including pharmaceutical drugs, have high fixed costs which do not
show up on the Learner index because the equation only accounts
for

the

purpose

marginal
of

costs.

Defendants’

government-provided

argument

patents.

A

highlights

patent

creates

the
a

monopoly to protect the company’s investments in research in
- 23 -

development as an inducement to undertake those larger fixed costs.
It does not fully explain, however, why there would be excess
economic profits absent the patent.
Defendants also rely on United States v. Eastman Kodak Co.,
63 F.3d 95 (2d Cir. 1995), in support of their petition to exclude
Dr.

Leitzinger’s

calculations.

In

Kodak,

the

United

States

appealed a district court order granting a motion to terminate two
antitrust consent decrees from 1921 and 1954. Id. at 97. Integral
to the decision was the district court finding that the market for
film was worldwide and thus encompassed both foreign and domestic
film manufacturers. Id. at 102.
On appeal, the Government argued that the scope of the market
should be domestic, citing the Cellophane case fallacy. Id. at
103. In the Cellophane case, the Supreme Court found that while
the manufacturer “du Pont produced almost 75% of the cellophane
sold in the United States,” this “constituted less than 20% of all
‘flexible packaging material’ sales” and thus did not exercise
market power. United States v. E. I. du Pont de Nemours & Co., 351
U.S. 377, 379 (1956). Later academic literature criticized this
decision

because

it

failed

to

account

for

the

fact

that

a

monopolist “always faces a highly elastic demand; its products are
so overpriced that even inferior substitutes begin to look good to
consumers.” Kodak, 63 F.3d at 103 (citing William M. Landes &
Richard A. Posner, Market Power in Antitrust Cases, 94 HARV. L.
- 24 -

REV. 937, 960–61 (1981)). In Kodak, the district court rejected
the

Government’s

unlike

the

Cellophane

inferior

fallacy

wrapping

argument

products

that

and
were

found

that,

compared

to

cellophane, “foreign film is an excellent substitute for Kodak
film.” 63 F.3d at 103.
The government appealed, arguing that because “the sales
price of Kodak film is twice the short-run marginal cost,” or .50
on the Lerner index, Kodak was earning monopoly profits and thus
had significant market power. Id. at 108–09. The Second Circuit
was unpersuaded, particularly because it had already affirmed the
district court’s determination on the scope of the market. Id. at
109. Noting the evidence in the record that “fixed costs in the
film industry are huge,” the Second Circuit affirmed the district
court’s termination of the antitrust decrees. Id. at 109–10.
Unlike

Kodak,

however,

the

Court

has

not

made

any

determinations in this litigation regarding the scope of the
market. Indeed, the Government in Kodak was clearly allowed to
present the Lerner index as evidence of profit and thus evidence
of market power throughout the district court proceedings. The
Court finds that the Lerner index is a well-established method
implemented in the field of economics to find evidence of market
power, although not conclusive in and of itself. See In re Solodyn
(Minocycline Hydrochloride) Antitrust Litig., 2018 WL 563144, at
*12 (“Plaintiffs’ evidence of high margins is insufficient direct
- 25 -

evidence as a matter of law to demonstrate market power.”); c.f.
Dial Corp. v. News Corp., 165 F.Supp. 3d 25, 41–42 (S.D.N.Y. 2016)
(permitting an expert to use a Lerner index analysis to determine
the margin variable in his critical loss analysis). For this
reason,

the

Court

denies

Defendants’

motion

to

exclude

Dr.

Leitzinger’s Lerner index analysis.
Next, Defendants move to exclude Dr. Leitzinger’s analysis
regarding cross-price elasticity. To determine the relationship
between wholesale drug prices and sales volume, Dr. Leitzinger
provides an econometrics regression model. (Leitzinger Rep. ¶ 81.)
Defendants argue that the model has the wrong inputs and thus
reviews the wrong market — i.e., the model charts retailers’
wholesale prices instead of the price paid by the patient, and as
a result it cannot include rebates and coupons in the analysis. As
a result, Dr. Leitzinger’s model essentially assumes that coupons
and rebates have no effect on price.
The

lack

questionable

of

rebate

assumption

and
given

coupons
the

in

extent

the
to

analysis
which

is

a

pharmacy

companies participate and compete via these programs. The Court’s
review

of

the

econometrics

analysis,

however,

finds

that,

regardless of inputs, the analysis was not performed with a degree
of rigor or reliability such that it would be “generally accepted
within the specific scientific field” of economics. Lapsley v.
Xtek, Inc., 689 F.3d 802, 810 (7th Cir. 2012). Specifically, Dr.
- 26 -

Leitzinger’s model does not include a graph to show the variability
in retail prices, and Dr. Leitzinger does not include a standard
error rate or sample size of his data. This lack of information
would make it impossible for another economist to replicate his
analysis or determine whether the dummy variables he included
smooths his data or are impermissibly selective.
Further,
hypothesis,

Dr.
noted

Leitzinger’s
in

the

evidence

model

as

the

against

the

“p-value,”

null

is

not

particularly helpful. Here, the p-values in Dr. Leitzinger’s table
are higher than 0.05 and thus do not meet the standard for
statistical

significance.

(Id.

¶

82.)

Because

there

is

no

significance, Dr. Leitzinger cannot rule out that retailer prices
have low cross-price elasticity. (Id.) When a product has lowprice elasticity as compared to another product, it indicates that
the price of either one could increase significantly without the
typical

corresponding

switch

to

the

lower

priced

alternative

product. As a result, it is proof that the products should be
considered to be in separate antitrust markets.
Given so many unknowns in his data, however, it appears
equally

plausible

that

if

Dr.

Leitzinger

changed

his

null

hypothesis, he could not rule out its opposite, i.e., that prices
have a high cross-price elasticity. “In a case involving scientific
evidence, evidentiary reliability will be based upon scientific
validity.” Daubert, 509 U.S. at 590 n.9. Because this analysis
- 27 -

lacks scientific validity and is equally likely to confuse the
jury as to assist them, the Court grants Defendants’ motion to
exclude this testimony.
Defendants’ final objection to Dr. Leitzinger’s testimony is
a legal one. Dr. Leitzinger’s damages model includes the assumption
that, had Endo and Impax not entered into the 2010 Settlement and
License Agreement, then Impax would have been selling generic Opana
ER on the market earlier. In Dr. Leitzinger’s model, however, the
entry of Impax’s generic Opana ER pushes downward not only the
price of Endo’s branded Opana ER, but also Actavis’ generic Opana
ER, which was on the market with its limited settlement agreement
from 2011 to 2012, and then sold from 2012 to 2016 ‘at risk’ while
the litigation was pending in federal court. Plaintiffs have
included the difference between Actavis’ generic actual price and
the projected downward price of Actavis’ generic Opana ER in their
calculations for damages. Plaintiffs theorize that an antitrust
injury affects the entire market, and thus even the marginal price
differences

in

companies

not

currently

involved

this

lawsuit

constitutes part of their injury. Defendants point out, however,
that a federal judge, later affirmed by the federal circuit, found
that Actavis’ generic was infringing on the later acquired patents.
The district court then enjoined Actavis from selling its generic
Opana ER until the later acquired patents’ expirations. Defendants
argue that by calculating damages that include Actavis’ generic
- 28 -

Opana ER, Dr. Leitzinger’s model incorporates ‘illegal’ conduct as
part of its damages model and ask that the model be excluded,
citing In re Wellbutrin XL Antitrust Litig. Indirect Purchaser
Class, 868 F.3d 132, 165 (3d Cir. 2017) (“It is not enough for the
Appellants to show that Anchen wanted to launch its drug; they
must also show that the launch would have been legal.”)
Plaintiffs argue that Actavis’ generic Opana ER was not
illegal from 2012 to 2016 because it is not illegal to sell a
generic drug ‘at-risk’ while the patent litigation is pending.
Anesta AG v. Mylan Pharms., Inc., No. CV 08-889-SLR, 2014 WL
3976456, at *2 (D. Del. Aug. 14, 2014) (“I agree with defendants
that, although their launch was at risk, it was not illegal when
it took place and, absent a directive from the Federal Circuit to
recall their generic products, defendants had no legal obligation
to do so.”). Plaintiffs also submitted a recalculated damages model
without Actavis’ generic Opana ER price differences after 2012.
Although Plaintiffs are correct that Actavis was not acting
in a criminal manner by using the Hatch-Waxman Act to launch atrisk,

the

fact

indisputably

remains

that

the

later

acquired

patents’ validity is now settled. As a result, the patents were
also valid while Actavis was selling its product ‘at-risk.’ The
Court will not permit Plaintiffs to benefit from generic entrants
who

infringed

on

Endo’s

patents

for

the

purpose

of

damages.

However, Dr. Leitzinger also submitted a revised model without
- 29 -

Actavis’ projected price differences which the Court finds to be
an acceptable alternative. To the extent that Dr. Leitzinger’s
revised

model

cures

this

deficiency,

then,

the

Court

denies

Defendants’ motion.
For the foregoing reasons, the Court grants in part and denies
in part Defendants’ motion to exclude certain portions of Dr.
Leitzinger’s testimony. (Dkt. No. 529.)
5. Defendants move to exclude partially
the opinions of James R. Bruno (Dkt. No. 537)
James R. Bruno is the Managing Director of a pharmaceutical
consulting
companies

company
develop

whose
and

work

includes

commercialize

assisting

active

emerging

pharmaceutical

ingredients and finished drug products. (Bruno Rep. ¶ 5, Mot. to
Exclude, Ex. 7, Dkt. No. 542-8.) Defendants move to exclude the
entirety of Mr. Bruno’s opinion and testimony, citing to two
objections:

first,

that

Mr.

Bruno

does

not

engage

in

expert

analysis, but instead reads and summarizes the documents already
in the record; second, that Mr. Bruno improperly speculates on
Impax’s state of mind.
The Court finds neither of these criticisms is persuasive.
Upon review of Mr. Bruno’s testimony, the closest that Mr. Bruno
comes to reiterating a factual summary is his detailing of the
progress Impax made prior to the 2010 Settlement Agreement. This
information, however, is crucial to Mr. Bruno’s expert opinion as
- 30 -

to whether an earlier commercial start date was feasible for
Impax’s

commercial

entry

of

generic

Opana

ER.

Mr.

Bruno’s

experience with the policies and procedures required for a mass
production

of

a

laboratory

drug

are

clearly

articulated

and

compared with Impax’s progress in his testimony.
Defendants also object to Mr. Bruno statements indicating
that Impax would have launched ‘at-risk,’ claiming that Mr. Bruno
is thus ascribing intent to Impax’s actions. As stated in his
testimony, Mr. Bruno only opines that Impax would be capable of
launching at a certain time period, and that it was up to the jury
to determine when Impax would have launched in a but-for world
without the 2010 Settlement Agreement. (Bruno Rep. ¶ 26.) The Court
holds that capacity and capability are within the purview of
acceptable expert testimony and are not related to Impax’s state
of mind. Defendants’ motion to exclude the testimony of Mr. Bruno
is denied. (Dkt. No. 537.)
6. Defendants move to exclude certain
opinions of Glen P. Belvis. (Dkt. No. 541.)
Glen P. Belvis is an intellectual property attorney who worked
for

over

20

years

at

a

nationally

recognized

intellectually

property firm. (Belvis Rep. ¶ 4, Mem., Ex. 1, Dkt. No. 542-2.) He
currently serves as intellectual property counsel for multiple
companies while maintaining his own law practice. (Id.) Among other
topics,

Mr.

Belvis

offers

testimony
- 31 -

regarding

the

technical

aspects of the patents in dispute and their likelihood of success
on the merits. Defendants object to one sentence of Mr. Belvis’
report. As part of his analysis, Mr. Belvis reports that Impax had
a “greater than 85% overall chance of ultimately prevailing at
trial and through appeal.” (Id. ¶ 431.) Defendants do not challenge
Mr. Belvis’ qualitative opinion that Impax “very likely” would
have won the litigation. (Id. ¶ 104–05.) Instead, Defendants
contend that the “85% chance” determination falsely denotes a level
of mathematical precision does not present in Mr. Belvis’ opinion
and incorrectly relied upon by a later-discussed expert, Dr.
McGuire, in his stock market analysis model.
Calculating a percentage chance of a but-for reality, such as
Mr.

Belvis’

hypothetical

jury

verdict,

requires

uncertain

estimates about human decisions and interactions. The Court is
skeptical

that

Defendants’

desired

veneer

of

mathematical

certainty on such an inherently dubious enterprise would be more
helpful

to

the

jury

than

what

Dr.

Belvis’

estimate

already

provides. As Dr. McGuire cannot enter “very likely” into his
mathematical model, it is reasonable for Mr. Belvis to draw upon
his expertise to provide an estimate in mathematical terms. To the
extent that Defendants wish to argue that “very likely” should be
a different percentage, they will have the opportunity to do so on
cross-examination before the jury.

- 32 -

Defendants also present a second argument, claiming that Mr.
Belvis is wrong on the merits. The disagreements on the accuracy
of Mr. Belvis’ expert opinion goes to the weight of the evidence.
For these reasons, Defendants’ motion to exclude Mr. Belvis’
testimony is denied. (Dkt. 541.)
7. Defendants move to exclude certain
opinions of Dr. Meredith Rosenthal (Dkt. No. 545)
Dr. Meredith Rosenthal is a Health Economics and Policy
Professor at Harvard University. (Rosenthal Rep. ¶ 1, Mem., Ex. 1,
Dkt. No. 560-2.) Dr. Rosenthal opines that generic prices would
have been lower without the 2010 Settlement and License Agreement
and calculates Plaintiffs’ damages based on those lower prices.
Defendants object to Dr. Rosenthal’s damages model on two grounds.
First, Dr. Rosenthal includes sales of Actavis in her damages
model,

even

after

Endo’s

later

acquired

patents.

Next,

approximately 37% of Dr. Rosenthal’s damages are attributed to
“Medicare Part D” patients, who are not part of the proposed class.
The Court grants the motion. Plaintiffs argue that they are
entitled to assume that Actavis would have begun selling at-risk
in the hypothetical world, like Actavis’ actual actions. Like the
analysis above, however, the question at issue is not about the
assumptions that Plaintiffs are permitted to incorporate into
their models. Now that two district courts and the federal circuit
have determined the later acquired patents are valid, there cannot
- 33 -

be damages that Plaintiffs “should” have received from Actavis
being in the market past the acquisition of the ‘216 and ‘122
patents. This fact prohibits any recovery after the patents’
issuances, and any model incorporating this for the purpose of
calculating damages is stricken. For this reason, the Court grants
the Defendants’ motion to exclude Dr. Rosenthal’s flawed damages
model. (Dkt. No. 545.)
8.

Defendants move to exclude the opinions
of Dr. Stephen R. Byrn (Dkt. No. 546)

Dr. Stephen R. Byrn is a Professor of Medical Chemistry at
Purdue University. (Byrn Rep. ¶ 3, Mem., Ex. 3, Dkt. 549-4.) He
offers the opinion that the underlying patents Endo asserted and
then settled in the 2010 Settlement and License Agreement are
invalid. (Id. ¶¶ 12–16.) Defendants argue that Dr. Byrn’s testimony
is

irrelevant

and

thus

will

not

assist

a

trier

of

fact

to

understand the evidence or determine a fact in issue. Defendants
argue that Dr. Byrn does not limit himself to the admissible and
entered evidence present at the time of the 2010 litigation, and
thus he will be unable to assist the upcoming jury in determining
whether or not a 2010 jury would have found the patents infringed
upon, and thus whether Impax or Endo would have prevailed in the
underlying litigation. Plaintiffs disagree vehemently, stating
that Dr. Byrn reached his conclusions based on the evidence Impax
advanced in its materials filed in the 2010 patent litigation. In
- 34 -

response, Plaintiffs reviewed each allegation made by Defendants
and then pointed to where it was used in the underlying litigation.
Defendants also object to Dr. Byrn’s responses to Drs. Lowman
and Fassihi’s expert opinions, claiming that they contain novel
arguments. Plaintiffs counter that it is Defendants’ experts who
advance the novel arguments, and Plaintiffs are thus required to
counter these arguments with their own expert.
Upon

review

of

the

disputed

evidence,

Court

finds

that

Defendants have failed “to identify a particular reference or piece
of information that was verifiably outside the scope” of the prior
record Dr. Byrn “relied upon to form his opinion on validity and
enforceability.”

United

Food

&

Com.

Workers

Loc.

1776

&

Participating Emps. Health & Welfare Fund v. Teikoku Pharma USA,
296 F.Supp. 3d 1142, 1186 (N.D. Cal. 2017). Ultimately, however,
both of Defendants’ arguments misunderstand the purpose of this
antitrust litigation. The purpose of the jury is to find whether
the actual patents in the underlying litigation were invalid, and
thus the 2010 SLA an unreasonable restraint on trade, and not
whether the patents would have been found valid in the but-for
world where the 2010 litigation continued without settlement.
Under Defendants’ framework of slavish devotion to the recreation
of the 2010 litigation, the Court would not be able to correct
clear errors in the prior litigation, and be forced to allow the
appellate court to review as would have after the 2010 litigation,
- 35 -

or, to Defendants’ detriment, Defendants could not benefit from
the knowledge that the 2012 lawsuit against Actavis would be
successful on the merits. Defendants cannot insist on benefiting
from later knowledge when it is convenient to Defendants and
otherwise argue the Court and Plaintiffs are handicapped from
bringing fresh analysis to the case. For these reasons, the Court
denies the motion. (Dkt. No. 546.)
9. Defendants move to exclude the opinions
of Patricia Zettler and Martin Lessem (Dkt. No. 550)
Plaintiffs have retained Patricia Zettler and Martin Lessem,
both attorneys, to opine on any additional regulatory impediments,
if any, Impax would have faced after receiving approval from the
FDA. Defendants move to exclude these opinions on the basis that
they are legal arguments, not expert opinions, and that Ms. Zettler
and Mr. Lessem are advancing opinions as to Impax’s intent and
state of mind, both of which are prohibited under Daubert.
The Court’s review of Ms. Zettler’s expert report found that
Ms. Zettler limited her opinions to (1) observations about the
FDA’s methods and processes regarding opioid launches generally,
and (2) her professional opinion that the FDA’s processes would
not have impeded a generic Opana ER product launch. (Zettler Rep.
¶¶ 19–68, Mem., Ex. 8, Dkt. No. 554-9.) The Court did not review
any initial report from Mr. Lessem, as no report was attached to
any of the fillings associated with this motion, however, a review
- 36 -

of

Mr.

Lessem’s

rebuttal

report

and

testimony

appear

to

be

similarly unrelated to Defendants’ concerns. Mr. Lessem’s rebuttal
report opposed Dr. Patel’s opinion regarding a “reasonable company
in Impax’s situation” would have faced regulatory hurdles to an
earlier generic Opana ER launch. (Lessem Rebuttal Rep. ¶ 19, Mem.,
Ex. 12, Dkt. No. 554-11.) Mr. Lessem instead opines that there is
no reason to think FDA’s final approval letter would have been
rescinded due to regulatory hurdles. (Id. ¶ 23.)
These opinions appear entirely unrelated to legal arguments
or Impax’s state of mind. In complex regulatory cases, opinions
regarding government regulations are permitted “to testify on
complex statutory or regulatory frameworks when that testimony
assists the jury in understanding a party’s actions within that
broader framework.” Antrim Pharm. LLC, 950 F.3d at 430–31. The
Court finds that the testimony of Ms. Zettler and Mr. Lessem will
be helpful to assist the trier of fact and denies Defendants’
motion. (Dkt. No. 550.)
10. Defendants’ motion to exclude partially
the opinions of Dr. Keith Leffler (Dkt. No. 552.)
Dr.

Keith

Leffler

is

a

Professor

of

Economics

at

the

University of Washington, specializing in antitrust and industrial
organization. He opines as to Endo’s market share, the effect of
Impax’s generic Opana ER on the market, and presents a model for
damages.

(Leffler

Rep.

¶

11,

Mem.,

- 37 -

Ex.

2,

Dkt.

No.

555-3.)

Defendants allege Dr. Leffler’s opinions on (1) an alternative
settlement, (2) damages, and (3) Endo’s market power are all
endemically flawed and do not pass the ‘reliability test’ in the
second prong of Daubert’s analysis. Defendants move to exclude all
aspects of these topics from Dr. Leffler’s testimony.
Like Dr. Leitzinger, Dr. Leffler also performs a Lerner index
analysis using Endo’s public SEC filings. Dr. Leffler similarly
admits that no firm would “engage in a research and development
project absent an anticipation of being able to sell at a price”
that would create a ‘high’ Lerner index number, which would allow
it to recoup its fixed costs, such as research and development
costs. (June 2019 Leffler Dep. 182:25-183:9). As stated in Section
III.A.4,

this

statement

explains

why

drug

manufacturers

seek

patent protections on newly developed drugs. Absent the patent,
however,

a

company

in

a

perfectly

competitive

market

would

nonetheless be forced to sell at lower-than-recoupable costs to
compete with those manufacturers who did not shoulder the initial
drug development outlays, as long as the company could charge
enough on a per-item basis to cover the products’ marginal cost.
As a result, this admission does not fully explain Endo’s high
economic profits beyond marginal costs.
Dr. Leffler also acknowledges that “third party insurers,
managed care entities, and pharmacies play a role in constraining
price

increases,”

but

considers
- 38 -

these

considerations

to

be

constraining the already-monopolized market of generic Opana ER,
similar to the marginal price sensitivity of cellophane in the
Cellophane case. (Leffler Rep. ¶ 50.) Despite these deposition
concessions pointed out by Defendants, the Court reaches the same
conclusion as it did with Dr. Leitzinger: a high Lerner index can
be

indicative

of

monopoly

power.

As

such,

it

is

permissible

evidence to provide to the jury. Defendants’ disagreement over the
extent that insurance negotiations affect economic profits can be
made before the jury. As such, Dr. Leffler is similarly permitted
to present his expert opinion. The motion to exclude this opinion
is denied.
Dr. Leffler also offers testimony regarding a hypothetical
and

more

procompetitive

agreement

between

Endo

and

Impax.

Defendant first argues that Dr. Leffler impermissibly opines that
an alternative agreement would have included the Broad License.
Plaintiffs explain, however, that Dr. Leffler assumes the Broad
License would have been included based on testimony by other fact
witnesses. “The fact that an expert’s testimony contains some
vulnerable assumptions does not make the testimony irrelevant or
inadmissible.” Stollings, 725 F.3d at 768. The Court therefore
declines to exclude Dr. Leffler’s testimony on this basis.
Defendants

also

object

to

Dr.

Leffler’s

hypothetical

agreement between Endo and Impax because Dr. Leffler picked his
entrance date based on a settlement offer letter from Impax.
- 39 -

Defendants argue that Dr. Leffler’s model works for numerous dates,
and thus it is not rational to pick one date instead of a range of
dates. The Court finds that Dr. Leffler is similarly assuming a
date based on the factual record which does not cause his testimony
to be suddenly inadmissible. As such, Defendants’ objections go to
the weight of the evidence to be submitted to the jury.
Finally, Defendants challenge Dr. Leffler’s damages models.
Dr. Leffler presents models on both a ‘continued litigation’ theory
as well as a ‘alternative settlement’ theory. First, the Court
notes that Defendants’ objection to the ‘alternative settlement’
is identical to their objection to the hypothetical procompetitive
agreement. In both cases, Defendants find fault with Dr. Leffler’s
inclusion of the Broad License. For the same reasons set forth
above, Dr. Leffler’s assumption that a Broad License would be
included in the Plaintiffs’ alternative settlement scenario is a
permissible part of Dr. Leffler’s damages model. The Court denies
the Defendants’ motion to exclude this model.
Second,

Dr.

Leffler’s

presents

multiple

‘continued

litigation’ damages models depending on various dates that Opana
ER could have come onto the market. The complication to any
continued

litigation

model,

however,

is

that

Endo

acquired

additional patents in 2012 which Endo immediately enforced against
all generic producers. To avoid this complication, Dr. Leffler
stops his damages model prior to the acquisition of the later
- 40 -

acquired patents. Rather magnanimously, Plaintiffs state that they
do not intend to seek damages after 2012.
Absent the 2010 SLA, Endo’s acquisition of additional patents
would have resulted in some change in the alleged oxymorphone ER
market based on Endo’s subsequent business decisions. On a general
level, Endo could have decided (1) to sell a generic Opana ER
either through its own production or a license agreement with
another company, (2) to restart operations to sell branded Opana
ER, or (3) to stop selling Opana ER entirely. Because some of these
post-2012 continued litigation alternative histories would have
decreased the competitiveness of the market or the price that Opana
ER was sold to consumers, the 2010 SLA contained potentially
procompetitive effects.
For this reason, Defendants argue that models that stop
calculating damages after 2012 are inherently inaccurate as they
do not consider the time periods where Plaintiffs received a
procompetitive effect. Defendants argues that it is solely because
of the 2010 SLA’s Broad License that Plaintiffs can purchase any
Opana ER product to this day. Defendants acknowledge that, in a
continued litigation alternative history, Plaintiffs may have been
able to purchase generic Opana ER earlier (either August 17, 2010
or July 14, 2011, as predicted Dr. Leffler’s various models) but
that ability would have stopped in 2012, and no Opana ER would
have been available at that point forward.
- 41 -

The

Court

agrees

in

part.

“[A]ny

model

supporting

a

‘plaintiff’s damages case must be consistent with its liability
case, particularly with respect to the alleged anticompetitive
effect of the violation.’” Comcast Corp. v. Behrend, 569 U.S. 27,
35 (2013) (citing ABA Section of Antitrust Law, Proving Antitrust
Damages: Legal and Economic Issues 57, 62 (2d ed. 2010)). Absent
the 2010 SLA and particularly after the FDA’s request for Endo to
remove the reformulated Opana ER, it is possible that Endo may
have

decided

to

exit

the

extend

release

oxymorphone

market

entirely. However, this is not the only potential outcome: Endo
may have made other, more financially lucrative decisions such as
continuing in the market as either a branded or generic product.
To succeed on the merits in a continued litigation scenario,
Plaintiffs must put forth evidence to support the likely outcome
of generic or branded Opana ER market without the 2010 SLA. What
Plaintiffs cannot do, however, is avoid the post-2012 market in
its entirety. For that reason, Dr. Leffler also cannot cut off his
damages model as to only some of the effects of the settlement.
For these reasons, the Court grants the motion to exclude the
challenged ‘continued litigation’ models and denies the motion on
all other grounds. (Dkt. No. 552.)

- 42 -

11. Defendants’ motion to exclude partially
the opinions of Dr. Thomas G. McGuire (Dkt. No. 556)
Dr. Thomas G. McGuire is Professor of Health Economics at
Harvard University. (McGuire Rep. ¶ 5, Mem., Ex. B, Dkt. No. 5593.) He has been retained by Plaintiffs to conduct an economic
analysis

of

the

2010

SLA

and

the

accompanying

joint-venture

agreement to determine whether the agreements are anticompetitive.
(Id. ¶ 2.) Defendants challenge two portions of Dr. McGuire’s
testimony. First, Defendants challenge Dr. McGuire’s assumption
that the Broad License would be part of any alternative settlement.
As determined in Section III.A.10 supra, the inclusion of an
assumption based on the testimony of fact witnesses is admissible,
and the Court similarly denies this part of the motion.
Second,

Defendants

challenge

Dr.

McGuire’s

testimony

regarding his stock price analysis. As part of his opinion, Dr.
McGuire

makes

the

following

assumption

about

the

real-world

financial markets:
If the announcement of a pay-for-delay settlement was
not anticipated by financial markets, new profits kept
by the brand will be capitalized by traders in financial
markets and reflected in the brand’s stock price (i.e.,
the market will reward the brand for keeping its monopoly
and associated profits beyond the expected expiration).
(Id. ¶ 151.) According to Defendants, Dr. McGuire’s resulting
opinion

on

Endo’s

stock

prices

is

methodologically

unsound.

Defendants first object to Dr. McGuire relying on Mr. Belvis’
opinion that Impax had a “greater than 85% likelihood of success”
- 43 -

in the underlying patent litigation. (Id. ¶ 184.) “[A]s a general
matter, there is nothing objectionable about an expert relying
upon the work a colleague.” Gopalratnam, 877 F.3d at 789. Dr.
McGuire is permitted to assume that the jury will accept the
testimony of another witness, and the Court will not prohibit the
jury’s access to Dr. McGuire’s model on that basis.
Defendants also argue that the stock price increase following
the announcement of the 2010 Settlement and License Agreement could
have been due to any number of factors beyond the settlement
announcement, and Dr. McGuire failed to properly consider the
myriad of other reasons a stock price fluctuates in his analysis.
Plaintiffs oppose the motion on the basis that Dr. McGuire’s work
has been published in prominent peer-reviewed economic journals.
See,

e.g.,

Do

“Reverse

Payment”

Settlements

Constitute

an

Anticompetitive Pay-for-Delay?, 22 Int’l J. Econ. Bus. 173 (2015).
The Court finds no issue with Dr. McGuire’s methodology, and any
theories that Defendants have on confounding variables properly go
to the weight of Mr. McGuire’s testimony and should be argued
before the jury. For these reasons, the Court denies the motion.
(Dkt. No. 556.)
B.
Plaintiffs

Plaintiffs’ Daubert Motions

filed

ten

motions

to

Exclude

various

experts

presented by Defendants. The Court reviews whether the witness is
“qualified as an expert by knowledge, skill, experience, training,
- 44 -

or education;” whether “the expert’s reasoning or methodology
underlying

the

testimony

[is]

scientifically

reliable;”

and

whether “the testimony [assists] the trier of fact to understand
the evidence or to determine a fact in issue.” Ervin v. Johnson &
Johnson,

Inc.,

492

F.3d

901,

904

(7th

Cir.

2007)

(citation

omitted).
1. Plaintiffs’ motion to exclude the
opinions of Dr. Nina Patel (Dkt. No. 519)
Dr. Nina Patel is Vice President of a consulting group that
specializes

in

advising

pharmaceutical,

biotech,

and

medical

device companies. (Patel Rep. ¶ 1, Curley Aff., Ex. 67, Dkt.
No. 534-71.)

Dr.

Patel

opines

that

it

“would

not

have

been

reasonable for a company in Impax’s position to have launched or
sold its generic Opana ER product without an FDA-approved risk
management program in place.” (Id. ¶ 14.)
The Hatch-Waxman Act “allows generic manufacturers to rely on
FDA’s

prior

approval

of

another

drug

with

the

same

active

ingredient — the reference listed drug (RLD) — to establish that
the generic drug is safe and effective.” KEVIN J. HICKEY, CONG. RSCH.
SERV., R45666, DRUG PRICING

AND

acknowledges

received

that

Impax

INTELL. PROP. L. at
a

“final

20.

Dr.

approval”

Patel
letter

regarding Impax’s generic Opana ER from the FDA on this basis.
(Patel Rep. ¶ 39.) While Dr. Patel appears to walk back her
specific claim that additional approvals were required to launch
- 45 -

a pharmaceutical drug in her deposition, Dr. Patel’s testimony
suggests that additional money, time, and research was required
before Impax could launch generic Opana ER. (See Patel Dep. at
416:14-22, Curley Aff., Ex. 70, Dkt. No. 534-74. (“I have no
opinion on [whether Impax had a statutory right to launch its
generic Opana product after final approval].”) While this may be
true for initial drugs coming onto the market, it is without
dispute that the FDA subsequently approved Impax’s application
based on Endo’s research and safety analyses without the additional
concern, cost or time highlighted by Dr. Patel.
An expert witness “ha[s] the responsibility to apply his [or
her] analysis to the facts of the case.” Deimer v. Cincinnati SubZero Prod., Inc., 58 F.3d 341, 345 (7th Cir. 1995). The Court finds
that Dr. Patel’s testimony did not do so here, and as such it would
be unhelpful to jurors during trial. The Court grants the motion
to exclude Dr. Patel’s testimony. (Dkt. No. 519.)
2. Plaintiffs’ motion to exclude partially
the opinions of Mr. Jonathan Singer (Dkt. No. 520)
Mr. Jonathan Singer is a patent law attorney who has been
hired by Defendants to rebut Plaintiffs’ patent expert, Mr. Glen
Belvis.

Plaintiffs

move

to

exclude

portions

of

Mr.

Singer’s

opinions and testimony, arguing that that it fails Daubert’s
relevancy

requirement

and

Federal

reliability requirement.
- 46 -

Rule

of

Evidence

702’s

The majority of Mr. Singer’s report is a review of Endo’s
current and pending patents at the time of the 2010 Settlement and
License Agreement. (Singer Rep. ¶¶ 118–261, Resp., Ex. 1, Dkt.
No. 601-2.) Plaintiffs ask the Court to exclude the concluding
paragraph of Mr. Singer’s report where Mr. Singer states that, for
the technical reasons described above, “one cannot simply assume
that

Endo

would

have

entered

into

an

alternative

settlement

agreement that provided (1) an earlier entry date for Impax; and
(2) broad freedom to operate, including a broad license to all
future patents covering Opana ER.” (Singer Rep. ¶ 262.) Plaintiffs
argue that this statement goes beyond the scope of Mr. Singer’s
expertise. Mr. Singer is a patent law attorney, not an economist,
and Mr. Singer opined on the settlement and license agreement terms
based off knowledge only provided by counsel instead of experts.
The Court declines to strike this portion of the opinion.
While Plaintiffs attempt to frame this as an economic opinion, the
discussion is in the context of Endo’s bargaining position for
settlement and licensing of its patents, a subject well within Mr.
Singer’s expertise.
Plaintiffs also move to exclude an earlier portion of Mr.
Singer’s report, where Mr. Singer notes that the “average cost of
bringing a new drug to market in the United States was $1.32
billion in 2010,” and that “new drugs can take at least ten years
to reach profitability, if at all.” (Id. ¶¶ 53–54.) Plaintiffs
- 47 -

argue that this statement is not relevant to the case at hand and
in no way relates to the costs of developing Opana ER or Opana
ER’s profitability profile. The Court agrees. The average cost of
drug development is not relevant here and, if provided, could
create an anchoring bias as to the cost Endo had in developing
Opana ER. The Court grants the motion to exclude this portion of
the testimony.
For the reasons stated above, the Court grants in part and
denies in part the motion to exclude portions of Dr. Singer’s
testimony. (Dkt. No. 520.)
3. Plaintiffs’ motion to exclude the
opinions of E. Anthony Figg (Dkt. No. 521)
E. Anthony Figg is an intellectual property attorney and cofounder of his present patent law firm who was hired by Impax to
assess whether it was reasonable for Impax to settle with Endo.
(Figg

Rep.

¶¶

1–3,

Curley

Aff.,

Ex.

17,

Dkt.

No.

534-17.)

Plaintiffs move to exclude two of Mr. Figg’s opinions regarding
the

2010

Settlement

and

License

Agreement.

First,

Plaintiffs

object to Mr. Figg’s opinion that it was “reasonable” or “prudent”
for Impax to settle. Second, Plaintiffs move to exclude Mr. Figg’s
opinion that the agreement “likely provided Impax the earliest

- 48 -

opportunity to sell generic Opana ER to the benefit of consumers.”
(Id. ¶ 3.)
Plaintiffs argue that they do not challenge Impax’s right to
settle, or even Impax’s right to settle reasonably. Generally,
private parties may contract with each other in any way not
prohibited by law. Here, however, Plaintiffs challenge the reverse
payments between Endo and Impax as proof of Endo and Impax’s
collusive behavior. According to Mr. Figg’s deposition testimony,
however, he did not consider the reverse payments when making his
determination about reasonableness. Mr. Figg also took pains to
state that he does not “intend[] to comment on the rule of reason
analysis in the antitrust sense” but rather offers an opinion on
the

“reasonable

outcome

of

the

patent

litigation.”

(Figg

Dep. 196:8–11, Curley Aff., Ex. 18, Dkt. No. 534-18.) Because the
reasonableness of the patent litigation is not in dispute, the
Court agrees with Plaintiffs that Mr. Figg’s testimony is not
relevant

and

thus

unhelpful

to

the

jury.

The

Court

grants

Plaintiffs’ motion to exclude this portion of Mr. Figg’s testimony.
The Court finds Mr. Figg’s second opinion to be equally
problematic.
implement

any

Mr.

Figg’s

scientific

expert
method

report
for

does

reaching

not
his

describe

or

conclusions

regarding what the “likely” earliest opportunity Impax had to sell
generic Opana ER. “An expert scientific opinion must be grounded
in the ‘methods and procedures of science,’ and must consist of
- 49 -

more than simply ‘subjective belief or unsupported speculation.’”
Cummins v. Lyle Indus., 93 F.3d 362, 368 (7th Cir. 1996) (quoting
Deimer, 58 F.3d at 344). As Mr. Figg fails to offer a method for
reaching his conclusion, the Court grants the Plaintiffs’ motion
to exclude Mr. Figg’s opinion in this matter. (Dkt. No. 521.)
4.

Plaintiffs’ motion to exclude opinions
of Dr. Anthony Lowman (Dkt. No. 522)

Dr. Anthony Lowman is a Professor of Chemical Engineering at
Drexel University. (Lowman Rep. ¶¶ 1–2, Resp., Ex. 1, Dkt. No. 5952.) He was hired by Defendants to provide an expert opinion on the
patent infringement claim in Impax’s ANDA that gave rise to the
lawsuit between Endo and Impax. (See id. ¶¶ 11–13.) Plaintiffs
move to exclude Dr. Lowman’s testimony because Dr. Lowman allegedly
applies the wrong standard in the patent infringement claims.
Specifically,
interchanges

Plaintiffs
the

claim

material

that

Dr.

description

Lowman
from

impermissibly

“that

which

is

effective to slow the hydration of the gelling agent without
disrupting the hydrophilic matrix” with the “hydration rates of
the tablets” generally. (Mot. at 1–2, Dkt. No. 522.) Defendants
disagree and argue that Dr. Lowman only used the term “tablets” as
a shorthand for measuring the gelling agent.
Plaintiffs’ objection to Dr. Lowman’s testimony appears to
this Court to be a distinction without a difference, as the
hydration of the tablet will necessarily be a hydration of the
- 50 -

gelling agent that resides within the tablet. To the extent that
Plaintiffs disagree, however, it is with the “soundness of the
factual underpinnings of the expert’s analysis and the correctness
of the expert’s conclusions based on that analysis” and not with
Dr. Lowman’s credentials, methods, or relevance to this case. Smith
v. Ford Motor Co., 215 F.3d 713, 718 (7th Cir. 2000). As such, the
disagreement must be left to the trier of fact. The Court denies
Plaintiffs’

motion

to

exclude

Dr.

Lowman’s

testimony.

(Dkt.

No. 522.)
5. Plaintiffs’ motion to exclude the
opinions of Dr. Reza Fassihi (Dkt. No. 524)
Dr. Reza Fassihi is a Professor in Biopharmaceutics and
Industrial Pharmacy at Temple University. (Fassihi Rep. ¶ 2, Resp.,
Ex. 1, Dkt. No. 596-2.) Dr. Fassihi was initially hired by Endo in
the underlying 2010 litigation and was rehired in the current
litigation to provide similar testimony on the disputed patents.
Plaintiffs move to exclude Dr. Fassihi’s opinions, arguing she
used the incorrect standard of law when determining whether the
underlying patents were valid.
Dr.

Fassihi’s

testimony

centers

around

the

“anticipation

reference” defense to a patent infringement suit. A patent cannot
be granted if the invention was “described in a printed publication
in this or a foreign country . . . more than one year prior to the
date of the application for patent in the United States.” 35 U.S.C.
- 51 -

§ 102(b)(2002)(amended 2011). An anticipatory reference discloses
“each and every element of the claimed invention, whether it does
so explicitly or inherently.” In re Gleave, 560 F.3d 1331, 1334
(Fed. Cir. 2009) (citing Eli Lilly & Co. v. Zenith Goldline
Pharms., Inc., 471 F.3d 1369, 1375 (Fed. Cir. 2006)). “Anticipation
does not require the actual creation or reduction to practice of
the

prior

art

subject

matter;

anticipation

requires

only

an

enabling disclosure.” Schering Corp. v. Geneva Pharms., 339 F.3d
1373, 1380 (Fed. Cir. 2003).
According to Plaintiffs, Dr. Fassihi incorrectly discounts
several

disclosures

that

potentially

qualify

as

“anticipatory

disclosures” of the sustained release component of the underlying
litigation patents. Dr. Fassihi’s testimony states that there
isn’t enough data attached to these disclosures to prove the idea
works correctly, and thus the disclosures fail to meet the standard
for anticipatory disclosures under federal law. Plaintiffs argue
that proof is not legally necessary, and Dr. Fassihi’s incorrect
espousal of law would mislead jurors if presented at trial.
In response, Defendants first argue that it would be unfair
to limit Dr. Fassihi’s testimony in any manner because Impax did
not move to limit Dr. Fassihi’s testimony prior to the 2010
Settlement and License Agreement. As pointed out by Plaintiffs,
however, the 2010 trial was intended before a judge, as opposed to
a jury, which necessarily changes Plaintiffs’ trial strategy.
- 52 -

Further,

as

previously

stated,

the

Court

is

unconvinced

by

Defendants arguments that an exact replica of 2010 is required to
meet Defendants’ exacting sense of fairness. The Court’s hands are
not so tied such that it cannot correct mistakes of law that might
have occurred had the original trial happened as scheduled; to
preserve

potentially

incorrect

proceedings

in

the

name

of

“fairness” would compound only the original mistake instead of
fixing it. The Court freely considers whether Dr. Fassihi’s opinion
incorrectly

states

the

legal

requirements

for

anticipatory

disclosure.
Defendants’ second argument is that Plaintiffs have presented
only inherent anticipatory disclosures, as opposed to explicit
ones. Defendants argue that, because there are only inherent
disclosures,

Plaintiffs

have

a

somewhat

higher

standard,

as

articulated in Continental Can Co. USA, Inc. v. Monsanto Co.:
Inherency, however, may not be established by
probabilities or possibilities. The mere fact that a
certain thing may result from a given set of
circumstances is not sufficient. If, however, the
disclosure is sufficient to show that the natural result
flowing from the operation as taught would result in the
performance of the questioned function, it seems to be
well settled that the disclosure should be regarded as
sufficient.
948 F.2d 1264, 1269 (Fed. Cir. 1991) (quoting In re Oelrich, 666
F.2d 578, 581 (C.C.P.A. 1981)). According to Defendants, the fact
that the prior disclosures stated “sustained-release over any
desired period and, in particular, over a twelve-hour period” (Mot.
- 53 -

at 7, Dkt. No. 524.) does not show that “the disclosure of the
required ‘sustained release’ as construed by the court (release
out of a tablet over 12 hours does not equate to maintaining
therapeutically beneficial levels of the active in a patient’s
bloodstream for 12 hours).” (Resp. at 16., Dkt. No. 596).
Even using Defendants’ inherency standard, the natural and
expected result of having a sustained-release drug over a twelvehour period would be to have the drug be present in the patient’s
bloodstream over that same period. Defendants may argue on the
factual record that the prior anticipatory patents did not, for
some reason not mentioned in the briefing, intend for the drug to
enter the bloodstream. The Court was not provided with any evidence
to suggest that this patent intended something other than the
natural result of a sustained drug release. For this reason, the
Court holds that Defendants cannot use an expert testimony to
require more than the “inherency” standard required by law. The
Court grants Plaintiffs’ request that Dr. Fassihi’s testimony be
excluded

to

the

extent

that

it

suggests

additional

proof

as

required by law. (Dkt. No. 524.)
6. Plaintiffs’ motion to exclude the
opinions of Dr. Christopher J. Gilligan (Dkt. No. 525)
Dr. Christopher J. Gilligan is Chief Physician at Brigham and
Women’s

Hospital

and

Assistant

Professor

at

Harvard

Medical

School. (Gilligan Rep. ¶ 2, Resp., Ex. 1, Dkt. No. 599-2.) Dr.
- 54 -

Gilligan

has

been

asked

to

offer

his

opinions

on

the

interchangeability of long-lasting opioids and the benefits of the
tamper resistant reformulated Opana ER. (Id. ¶ 1.) Plaintiffs
object to Dr. Gilligan’s characterizations about what clinicians
generally believed, beyond his own experience, claiming it lacks
reliable methodology or evidence. Plaintiffs also move to exclude
opinions

espoused

by

Dr.

Gilligan

that

suggest

that

the

reformulated Opana ER deterred abuse or was safer than original
Opana ER in any capacity. Plaintiffs argue such an opinion is
contrary to the facts in the case, as reformulated Opana ER was,
in fact, more dangerous as determined by the FDA.
In response, Defendants argue that doctors are permitted to
testify

about

uses

beyond

the

recommendations

of

the

FDA.

Defendants also argue that Dr. Gilligan is a leader in his field,
and thus qualified to testify generally about what physicians do
or don’t do, without an explicit methodology or scientifically
measured component. The Court agrees. Plaintiffs objections go to
the weight of the testimony and may be brought up at crossexamination. The motion is denied. (Dkt. No. 525.)
7. Plaintiffs’ motion to exclude the
opinions of Dr. Sumanth Addanki (Dkt. No. 526)
Dr. Sumanth Addanki is an economist and managing director of
an economist research company. (Addanki Rep. ¶ 1, Attachment,
Ex. 3, Dkt. No. 531-4.) Dr. Addanki primarily testifies regarding
- 55 -

Endo’s lack of market power, which Plaintiffs do not challenge on
this motion. Plaintiffs do, however, move to exclude some of Dr.
Addanki’s ancillary opinions.
First, Plaintiffs argue to exclude Dr. Addanki’s opinion that
“economics provides no standard to evaluate the size of the reverse
payments.” (Mot. at 4, Dkt. No. 526.) The Court was unable to find
where in Dr. Addanki’s expert report he purported to make such a
statement, and Plaintiffs unhelpfully did not cite to the record
in their briefing. Defendants, perhaps similarly confused, do not
address the point directly in their response. Since it is unclear
to the Court whether Dr. Addanki holds this position in dispute,
and, if so, the exact context for the statement, the Court denies
the motion.
Plaintiffs’ second contention also relates to another of Dr.
Addanki’s opinions on reverse payments. Under F.T.C v. Actavis,
reverse payment settlements (i.e., payments from patent holder
plaintiff to patent infringer defendant) are subject to the rule
of reason test because the reverse payment could either be an
innocuous “rough approximation of the litigation expenses saved
through the settlement” or a problematic transfer of “‘large sums’
to induce ‘others to stay out of its market.’” 570 U.S. at 156
(citing P. Areeda & H. Hovenkamp, Antitrust Law ¶ 2046, p. 351 (3d
ed.

2012)).

According

to

Dr.

Addanki,

it

is

impossible

for

Plaintiffs in this case to establish the size of the reverse
- 56 -

payment associated with the 2010 Settlement and License Agreement.
The terms of the 2010 SLA were conditioned on real-world events —
specifically, the sale numbers of branded Opana ER prior to the
launch date — so there was no exact payment calculated at the time
of the agreement. (Addanki Rep. ¶¶ 112–127.) Without a specific
number in the agreement, Dr. Addanki opines that the settlement
agreement could not have contained a problematic reverse payment.
Plaintiffs argue this standard is incorrect as a matter of law and
ask the Court to find that the standard for a reverse transfer is
met if the parties could estimate the worth of the contract at the
time of the agreement, and that estimation was greater than the
estimated attorneys’ fees.
In support, Plaintiffs cite to language in Actavis and Brown
Shoe Co. v. United States. Actavis, 570 U.S. at 158 (“[A] court,
by examining the size of the payment, may well be able to assess
its

likely

anticompetitive

effects

along

with

its

potential

justifications without litigating the validity of the patent.”);
Brown

Shoe

(“Congress

Co.
used

v.
the

United
words

States,
‘may

370
be

U.S.

294,

323

(1962)

to

lessen

substantially

competition,’ to indicate that its concern was with probabilities,
not

certainties.

Statutes

existed

for

dealing

with

clear-cut

menaces to competition; no statute was sought for dealing with
ephemeral possibilities.”)

- 57 -

Defendants object, claiming that “[i]t is necessary . . . to
show” that an agreement produces “actual harm to competition,”
citing Bunker Ramo Corp. v. United Bus. Forms, Inc., 713 F.2d 1272,
1283 (7th Cir. 1983). According to Defendants, Plaintiffs must
prove actual harm as reviewed at the time the agreement. Because
the payment amount was not known at the time of the agreement, and
the estimated payment not “actual harm,” Defendants are in effect
arguing that any contract containing a contingency would escape
review under the Sherman Act and other antitrust laws. Defendants
go on to argue that it is only after Plaintiffs have shown actual
harm that Defendants need to show a procompetitive reason for the
agreement’s terms.
The logic of this argument is flawed. Plaintiffs must prove
both an actual antitrust injury and an unreasonable restraint on
trade to succeed on an antitrust claim. In re Humira (Adalimumab)
Antitrust Litig., 465 F.Supp. 3d 811, 835 (N.D. Ill. 2020). To
prove the injury, Plaintiffs may rely on the actual amount paid
from Endo to Impax. To show the parties engaged in an unreasonable
restraint on trade, Plaintiffs may present the parties’ expected
outcome at the time the contract was signed. Unexpected market
forces are a part of all negotiations, and that alone cannot
prohibit a contract from being in violation of antitrust laws. By
separately requiring both components, an attempted unreasonable

- 58 -

restraint of trade that did not result in an actual injury would
properly fail to state a claim.
Importantly, the provision at issue here gave Endo full
control over whether to continue to sell branded Opana ER or
whether to take it off the market, which in turn controlled how
much

money

would

be

provided

to

Impax

under

the

contingent

provisions. This control aligns with the traditional concerns of
reverse payments. See Actavis, 570 U.S. at 157 ([W]here a reverse
payment threatens to work unjustified anticompetitive harm, the
patentee likely possesses the power to bring that harm about in
practice.”). To the extent that Dr. Addanki’s opinion relies on
Defendants

unsound

articulation

of

law,

the

Court

grants

Plaintiffs’ motion to exclude Dr. Addanki’s opinion regarding the
contract’s uncertainty.
Plaintiffs next object to Dr. Addanki’s opinions regarding
the alternative settlements presented by Plaintiffs. According to
Dr. Addanki, unless Plaintiffs show “the parties would have agreed
on an alternative settlement [without a reverse payment,] the
provisions

giving

rise

to

the

payment

cannot

be

deemed

‘unjustified’ as a matter of economics.” (Addanki Rep. ¶ 129.)
Similar to Dr. Figg, Section III.B.3 supra, Dr. Addanki proposes
to testify as to whether it is economically reasonable to enter
into this contract between two private actors. The Court notes
that many contracts that are prohibited by antitrust law would be
- 59 -

‘economically reasonable’ to enter, e.g., a cartel agreement is
usually wildly profitable, and it would be economically rational
to enter such agreement. However, the question that will be before
the

jury

in

this

matter

is

not

whether

the

contract

was

economically reasonable or even advantageous for both parties.
Instead, the jury will determine whether the 2010 SLA was an
unreasonable restraint on trade. Presenting the jury with an
unrelated

reasonability

standard

is

unhelpful

and

potentially

misleading. For this reason, the Court grants the motion to exclude
this section of Dr. Addanki’s testimony.
In addition to the above concerns, Plaintiffs object to Dr.
Addanki’s

opinions

regarding

the

economic

feasibility

of

an

alternative settlement absent the FDA’s approval of reformulated
Opana ER and Dr. Addanki’s characterization of the 2010 Settlement
and

License

Agreement

as

procompetitive.

In

these

cases,

Plaintiffs’ objections are disputes with factual evidence and
conclusions based on those facts, and thus should be presented to
the jury. The Court denies the motion to exclude these opinions.
(Dkt. No. 526.)
8. Plaintiffs’ motion to exclude the
opinions of Dr. Jody L. Green (Dkt. No. 527)
Dr. Jody L. Green is currently the Chief Scientific Officer
at Inflexxion, a health analytics company. (Green Rep. ¶ 9, Resp.,
Ex. 1, Dkt. 597-2.) Dr. Green testifies that the new reformulated
- 60 -

Opana ER “was associated with a reduction in the overall rate of
abuse for Opana ER.” (Id. ¶ 14.) Plaintiff seeks to exclude Dr.
Green’s testimony in its entirety as it is (1) irrelevant, (2)
rejected by the FDA, and (3) based on unreliable data.
Defendants object, claiming that it would be prejudicial to
Endo if Plaintiffs could characterize the FDA’s actions without an
opportunity for Endo to rebut Plaintiffs’ interpretations. The
Court disagrees. The reformulation of Opana ER is only marginally
relevant to the underlying patent litigation at the heart of this
case. Whether or not the reformulation was successful is arguably
even less relevant. Moreover, the facts surrounding the FDA’s 2013
and 2017 decisions regarding the reformulated Opana ER are public
and

straightforward.

Information,

U.S.

See
Food

Oxymorphone
&

Drug

(marketed

Admin.,

as

(Feb.

Opana
6,

ER)

2018)

https://www.fda.gov/drugs/postmarket-drug-safety-informationpatients-and-providers/oxymorphone-marketed-opana-erinformation. Both parties may characterize the public statements
through their attorneys at argument, but Defendants cannot produce
an expert whose testimony directly contradicts the FDA and the
facts of the case. The Court grants Plaintiffs’ motion to exclude
Dr. Green’s testimony. (Dkt. No. 527.)

- 61 -

9. Plaintiffs’ motion to exclude the
opinions of Dr. Louis P. Berneman (Dkt. No. 528)
Dr. Louis P. Berneman holds a doctorate in Education and is
currently managing director of a technology transfer consulting
company. (Berneman Rep. ¶ 76, Curley Aff., Ex. 13, Dkt. No. 53413.) Dr. Berneman assesses the commercial reasonableness of the
Parkinson’s Disease joint venture between Impax and Endo, entered
into by the parties at the same time as the 2010 SLA. (Id. ¶ 11.)
Plaintiffs challenge Dr. Berneman’s ‘fair value’ analysis, arguing
that Dr. Berneman does not employ any methodology when making this
determination. Plaintiffs point to Dr. Berneman’s testimony where
he acknowledges that he did not use any of the industry standards,
nor

did

he

identify

any

comparable

contracts,

or

do

any

“independent evaluation.” (Berneman Dep. 173:11–12, Curley Decl.,
Ex. 16, Dkt. No. 534-16.) As a result, Plaintiffs move to exclude
his testimony based on his lack of methodology.
Defendants object, stating that Dr. Berneman relies entirely
on Endo’s contemporaneous valuation for his opinion. Defendants
further argue that it is necessary for Dr. Berneman to explain
Endo’s contemporaneous valuation despite those facts already being
in the record for the jury to consider. The Court disagrees.
Because

Dr.

Berneman

does

no

valuation

or

other

independent

analysis, the Court grants Plaintiffs’ motion to exclude Dr.
Berneman’s testimony. (Dkt. No. 528.)
- 62 -

10. Plaintiffs’ motion to exclude experts that post-date
the challenged reverse payment agreement. (Dkt. No. 523.)
Finally, Plaintiffs move to exclude certain portions of the
opinions of Dr. Fassihi, Mr. Singer, Mr. Figg, and Dr. Addanki,
each of whom has already been discussed in this opinion. All four
experts opine in some way on the patents acquired by Endo after
the 2010 Settlement License and Agreement. Plaintiffs argue that
these patents are not relevant to any issue in the case, and thus
these

experts’

opinions

should

be

discarded.

In

support,

Plaintiffs cite to Valley Drug Co. v. Geneva Pharmacy, Inc., 344
F.3d 1294, 1306 (11th Cir.), cert. denied 543 U.S. 939 (2004)
(“[T]he reasonableness of agreements under the antitrust laws are
to be judged at the time the agreements are entered into.”) Because
these

patents

did

not

exist

at

the

time

of

the

agreement,

Plaintiffs argue that any mention of them is inappropriate in the
trial.
The Court denies the motion. (Dkt. No. 523.) When deciding as
to whether there was an unreasonable restraint on trade, the jury
takes into consideration “a variety of factors, including specific
information about the relevant business, its condition before and
after the restraint was imposed, and the restraint’s history,
nature, and effect.” State Oil Co. v. Khan, 522 U.S. 3, 10 (1997).
As a result, the later acquired patents are relevant to the
determination as to whether the overall effect of the agreement
- 63 -

was an unreasonable restraint on trade and whether an actual
antitrust injury resulted from the restraint on trade.
C.

Motions for Summary Judgment

Having reviewed all Daubert motions, the Court turns to
Defendants’ two motions regarding summary judgment. The first
motion contends that Plaintiffs have failed to show that the 2010
Settlement and License Agreement between Endo and Impax caused an
injury, and that Plaintiffs cannot show damages from the 2010 SLA’s
restraint on trade because Plaintiffs would be financially worse
off absent the agreement. The second motion argues that there
should be summary judgment as to the underlying patent issues in
this case. For the reasons below, the Court denies all parts except
Defendants’ motion on the state claims.
1.

Motion for Summary Judgment on Causation and Damages

Section
contract,

1

of

the

combination

Sherman
in

the

Act

form

declares
of

trust

illegal
or

“[e]very

otherwise,

or

conspiracy, in restraint of trade or commerce.” 15 U.S.C. § 1. To
state a claim, Plaintiffs must plead “(1) a contract, combination,
or conspiracy; (2) a resultant unreasonable restraint of trade in
a relevant market; (3) and an accompanying injury.” In re Humira
(Adalimumab) Antitrust Litig., 465 F.Supp. 3d at 835 (citation
omitted). In this case, Plaintiffs, all of whom purchased Opana ER
either wholesale or individually, argue that the 2010 Settlement
and

License

Agreement

between

Endo

- 64 -

Pharmaceuticals

and

Impax

Laboratories, Inc. was an unreasonable restraint on trade in the
extended release oxymorphone market which caused financial loss.
Defendants argue that Plaintiffs have not proven an antitrust
injury, however, the arguments employed by Defendants primarily
hinge on whether the restraint is unreasonable. The Court reviews
the best arguments presented by Defendants in both cases. Finally,
the Court addresses Defendants argument that Plaintiffs have been
unable to prove damages in this action.
a.

Unreasonable Restraint on Trade

Under Actavis, courts reviewing reverse payment agreements
apply the rule of reason test. 570 U.S. at 156. The test directs
courts to determine “whether under all the circumstances of the
case the restrictive practice imposes an unreasonable restraint on
competition.” Arizona v. Maricopa Cnty. Med. Soc’y, 457 U.S. 332,
343 (1982). Judges consider the following factors: “(1) whether
the alleged agreement involved the exercise of power in a relevant
economic market, (2) whether this exercise had anti-competitive
consequences,
efficiencies

and
or

(3)
other

whether
economic

those

detriments

benefits.”

In

outweighed
re

Nexium

(Esomeprazole) Antitrust Litig., 968 F.Supp. 2d 367, 387 (D. Mass.
2013) (citations omitted). The parties also engage in a “threestep, burden-shifting framework.” Ohio v. Am. Express Co., 138
S.Ct. 2274, 2284 (2018). The plaintiff “has the initial burden to
prove

that

the

challenged

restraint

- 65 -

has

a

substantial

anticompetitive
market.”

Id.

effect
If

that

harms

successful,

consumers

the

in

defendant

the
must

relevant
show

a

procompetitive reason for the restraint. Id. If the defendant can
make this showing, then the burden “shifts back to the plaintiff
to

demonstrate

that

the

procompetitive

efficiencies

could

be

reasonably achieved through less anticompetitive means.” Id.
First,

a

reasonable

juror

could

conclude

that

Opana

ER

constituted its own market, and thus an agreement regarding Opana
ER was an exercise of market power. Patent ownership of a good or
manufacturing process is not dispositive of market power. See
Illinois Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28, 45
(2006) (“Congress, the antitrust enforcement agencies, and most
economists have all reached the conclusion that a patent does not
necessarily confer market power upon the patentee.”) In this case,
however, it is undisputed that Endo was selling Opana ER at a large
profit. Dr. Leffler and Dr. Leitzinger estimate between 60% to 93%
profit beyond marginal cost. (See Leitzinger Rep. ¶ 53 (“Endo’s
reported contribution margins for 2011 and 2012 were 74.3 percent
and 60.7 percent, respectively.”); Leffler Rep. ¶ 48 (“The evidence
in this case shows that Endo achieved Lerner Indices as high as
.93 from 2008 through 2011.”) In contrast, the DOJ scrutinizes
mergers with a 5% increase in price over marginal cost. Horizontal
Merger Guidelines §§ 4, 4.1.1, 4.2, 4.2.1.

- 66 -

Taken alone, of course, there are other explanations for the
high profit margin, including the research and other fixed costs
associated with drug development. Here, Impax has presented enough
supporting evidence that a reasonable juror could find Endo’s
actions regarding Opana ER on the underlying litigation patents to
be evidence of shoring up supracompetitive pricing practices. For
example, Endo imitated lawsuits and then settled with ANDA filers
Actavis

and

Impax,

both

of

whom

allegedly

infringed

on

the

underlying litigation patents. Part of the reason the Court is
faced with the question of whether the underlying patents are valid
in this litigation is because Endo did not allow the jury to make
a determination about the underlying patent lawsuits, preferring
instead to settle that first round of patent disputes. In contrast,
once Endo had the later acquired patents, Endo relied on their
protections to twice reach trial and win.
Further, as repeatedly emphasized by the Defendants, Endo
negotiated a settlement agreement with Impax that potentially
negated the need for a reverse payment based on Endo’s future
conduct. For example, if Endo had continued to sell Opana ER at a
similar volume up until Impax’s launch, a small or non-existent
reverse payment might have been instituted. Endo instead chose to
transition the market over to the more profitable reformulated
Opana ER and pay Impax $102 million. A reasonable juror could find
this behavior evidence of protecting monopoly profits to the
- 67 -

detriment of the consumer. For this reason, there is sufficient
evidence such that a juror could find there to be evidence of
market power.
Plaintiffs have the initial burden of proof to show this
exercise of market power had a detrimental effect on competition.
Assuming the underlying litigation patents to be invalid, the
primary harm to the consumer in a Hatch-Waxman Act related lawsuit
is the late start date of the generic entrant, which increases the
amount of time that customers pay artificially inflated prices. In
the 2010 Settlement and License Agreement, there was also a No
Authorized Generic clause, where Endo agreed to forbear selling
generic oxymorphone ER while Impax was the exclusive generic market
entrant, again allowing higher prices to the detriment of the
consumer.
These

anticompetitive

practices,

however,

are

only

anticompetitive to the extent the underling litigation patents are
invalid. Actavis instructs that “it is normally not necessary to
litigate patent validity to answer the antitrust question.” 570
U.S. at 157. Instead, “[a]n unexplained large reverse payment
itself would normally suggest that the patentee has serious doubts
about the patent’s survival.” Id. The combination of a delayed
release and a large payment to the generic drug producer, such as
in this case, “suggests that the payment’s objective is to maintain
supracompetitive prices to be shared among the patentee and the
- 68 -

challenger rather than face what might have been a competitive
market.” Id.
Once Plaintiffs meet their initial burden, it is Defendants’
burden to show the procompetitive benefits of the anticompetitive
restraint. “An allegedly anticompetitive restraint survives a rule
of

reason

analysis

justifications

and

if

it

achieves

is

reasonably

legitimate,

necessary

to

procompetitive
achieve

those

justifications.” In re Wellbutrin XL Antitrust Litig., 133 F.Supp.
3d 734, 760 (E.D. Pa. 2015), aff’d sub nom. In re Wellbutrin XL
Antitrust Litig. Indirect Purchaser Class, 868 F.3d 132 (3d Cir.
2017).
According

to

Defendants,

“the

undisputed

evidence

demonstrates that the 2010 SLA benefitted [Plaintiffs].” (Mem. at
20, Dkt. No. 558.) Because of the Broad License provision, Impax
was licensed to sell generic Opana ER even if Endo acquired
additional patents. Defendants argue this procompetitive license
outweighs any anticompetitive effects from the other provisions in
the contract. Without the Broad License, Defendants would be
entitled to either reintroduce branded Opana ER, which would be
more expensive, or take oxymorphone ER entirely off the market
until the expiration of the last acquired patent. Defendants state
that Plaintiffs cannot prove that Defendants would have agreed to
Impax starting production any earlier than January 2013. As a

- 69 -

result, Defendants argue that Plaintiffs are worse-off without the
2010 SLA.
A reverse payment settlement has three components. First, the
plaintiff agrees to stop pursuing the patent infringement case.
Second, and theoretically in return, the defendant stops the
production and sale of the generic version of the drug until a
later time. In theory, if the parties feel the patent is likely to
be found valid by the Court, the start date for the generic entrant
would be closer to the patent’s expiration, and in a weak patent
case, earlier and closer to the FDA’s ANDA approval date. The
problem identified in Actavis, however, is the third element: a
payment from the plaintiff, the allegedly injured party in need of
relief, to the defendant. Under the rule of reason test, Actavis
contemplated

that

the

payment

could

be

explained

quite

unobjectionably as saved litigation costs or the “compensation for
other

services

that

the

generic

[defendant]

has

promised

to

perform—such as distributing the patented item or helping to
develop a market for that item [for the plaintiff].” 570 U.S. at
156. If it cannot be explained, however, there is a risk that “a
patentee is using its monopoly profits to avoid the risk of patent
invalidation or a finding of noninfringement.” Id.
In addition to the three elements outlined above, Endo and
Impax also agreed to the Broad License provision. Defendants would
like to use the Broad License as a counterbalance to the reverse
- 70 -

payment,

but

the

Broad

License

is

a

concession

in

the

same

direction as the reverse payment—from Endo to Impax. As a result,
while the Broad License has potentially beneficial effects to
consumers, it does not counterbalance the $102 million reverse
payment from Endo to Impax. Instead, the Broad License concession
serves only to highlight how much Endo valued Impax’s delayed
start, suggesting monopolistic effects instead of procompetitive
ones.
Defendants

also

argue

that

the

reverse

payment

was

an

unfortunate $102-million accident, as mathematically Defendants
could have engineered the sales to be between the Impax Royalty
provision (paid from Impax to Endo if sales remained strong) and
the Endo Credit (from Endo to Impax if sales faltered) such that
no

money

would

have

exchanged

hands.

While

this

is

one

interpretation of the facts, the Court finds it equally compelling
to interpret these facts mean that Endo was making so much money
by delaying the production of the generic drug and switching
patients from original Opana ER to reformulated Opana ER that the
$102 million cost was worth the benefit of cannibalizing Opana ER
sales. And even if the jury discounts the later payment due to
market uncertainty, the jury could consider either the ten million
dollar payment purportedly made in furtherance of the Parkinson’s
Disease joint venture or the Broad License itself as items of value
not fully explained under Actavis’ reverse payment rubric.
- 71 -

Assuming

that

there

are

sufficient

procompetitive

justifications for the restraint, Plaintiffs may also present
evidence that the procompetitive reason for the anticompetitive
restraints — in this case, the January 2013 start date provision
and the No Authorized Generic provision in the 2010 SLA – are “not
reasonably necessary to achieve the stated objective.” In re
Wellbutrin XL Antitrust Litig., 133 F. Supp. 3d at 753 (citation
omitted). Here, there is additional evidence in the record that
the Broad License was not a reasonably necessary part of the 2010
Settlement and License Agreement.
After Endo successfully defended Opana ER on the basis of its
later acquired patents, Endo also filed a lawsuit regarding the
Broad

License

filings,

between

inherent

in

itself
the

and

Broad

Impax.
License

According
provision

to

Endo’s

was

the

understanding that Endo would receive royalties from Impax’s use
of any future patents. The parties eventually settled the suit
without a determination on the merits, and Impax currently pays
half its profits to Endo, likely raising the current price of
generic Opana ER on the market. This is significant because it is
unclear how the other provisions of the agreement were a necessary
or even related to the Broad License, as Endo both settled a
multitude of other lawsuits without this provision and later
negotiated 50% of all proceeds from Broad License from Impax to
this day. It is at least equally plausible that procompetitive
- 72 -

conduct was sufficiently unrelated to the anticompetitive conduct
at issue and therefore not necessary to induce the procompetitive
conduct.
Ultimately, while it is “true that granting an exclusive
licensing agreement is procompetitive relative to not granting
it,” the question here is “whether a large and unjustifiable
reverse payment was made in order to avoid the risk of patent
invalidation.” In re Aggrenox Antitrust Litig., 94 F.Supp. 3d 224,
245 (D. Conn. 2015). “If a settlement that grants an exclusive
license violates the rule of Actavis, it is not saved by . . . the
licensing arrangement being more competitive than a settlement
agreement that lacked one.” Id.
Because a jury could find that the anticompetitive portions
were not necessary to receive the procompetitive benefit of Impax’s
licensing agreement, the Court declines to enter summary judgment
for Defendants on this basis.
b.

Anti-Trust Injury

To succeed on an antitrust claim, “a plaintiff must prove the
existence of “antitrust injury, which is to say injury of the type
the antitrust laws were intended to prevent and that flows from
that which makes defendants’ acts unlawful.” Atl. Richfield Co. v.
USA Petroleum Co., 495 U.S. 328, 334 (1990) (citation omitted).
This analysis is generally done in two parts: the type of injury
and the but-for cause of the injury.
- 73 -

The alleged injury at issue here, “the improper use of a
patent monopoly, is invalid under the antitrust laws.” Actavis,
570 U.S. at 148 (citation omitted). As a result, assuming the jury
first finds the patent to be invalid, the reverse payment agreement
constitutes

an

injury

that

the

antitrust

laws

were

meant

to

prevent.
Second, Plaintiffs must show that the injury is one “that
flows

from

that

which

makes

the

defendants’

acts

unlawful.”

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489
(1977). Endo and Impax entered into an agreement that delayed
production and sale of generic Opana ER. As a result, there is a
direct causal line between the agreement and the injury.
Defendants

argue

the

later

acquired

patents

are

an

independent barrier which breaks the causal chain. In support,
Defendants cite to In re Wellbutrin XL Antitrust Litig. Indirect
Purchaser Class, 868 F.3d at 152 (3d Cir. 2017) (holding that it
would be difficult to show an antitrust injury because “generic
entry would have been blocked by the ‘708 patent owned by Andrx.”)
However, the Third Circuit’s decision In re Wellbutrin XL Antitrust
Litigation contemplates a patent present at the time of the alleged
antitrust injury. Because Endo did not acquire its additional
patents until years after the agreement was signed, the additional
patents do not break the causal chain. The Court cannot grant
summary judgment on this ground.
- 74 -

c.

Damages

Defendants argue that, under either of Plaintiffs’ theories,
Plaintiffs have failed to prove that they are financially worse
off

from

the

2010

Settlement

and

License

Agreement.

First,

Defendants argue that Plaintiffs cannot prove that Endo would have
signed an alternative agreement that still included the Broad
License.

As

agreements

a
or

result,
in

in

either

Plaintiffs’

the

theory

theories
of

of

alternative

continued

litigation,

Plaintiffs would not have had access to generic Opana ER after
2016.
As discussed earlier in this opinion, the Court has permitted
Plaintiffs’ experts to pursue a theory of alternative settlement
based on factual evidence in the record that Impax would not have
agreed

to

a

settlement

without

the

Broad

License

provision.

Assuming the jury is convinced by this evidence, Plaintiffs theory
of damages based on an “alternative settlement” survives summary
judgment.
However, even under a continued litigation or alternative
agreement without the Broad License provision, the Court finds
that it is possible there would still be damages available to
Plaintiffs. Because there is evidence in the record disputing that
the procompetitive effect of the Broad License is reasonably
necessary to the anticompetitive conduct, Defendants’ theory of
damages on summary judgment also fails. As previously discussed,
- 75 -

both the reverse payment and the Broad License benefited Impax,
making it unlikely that they were interdependent on each other.
Nevertheless,

Defendants

claim

without

evidence

in

the

record that, absent the 2010 SLA, there would be no Opana ER on
the market, generic or otherwise. While technically possible, the
Court is skeptical that Defendants or any other rational economic
actor would have sued eleven generic drug companies to cease and
desist production of Opana ER and then forgo profits on seventeen
years of patent-protected pain medication.
There
continued

are

other

reasons

the

underlying

to

think

patent

that,

litigation,

had

the

parties

Defendants

and

Plaintiffs would have ended up in a similar financial situation.
It is undisputed that Endo made a strategic decision to distance
itself

from

the

original

Opana

ER

in

order

to

promote

the

reformulated version, including a stop on its own production and
petitions to the FDA to remove original Opana ER from the market
prior to the entrance of Impax and other generic drug producers.
Despite Endo’s best efforts, generic Opana ER did enter the market
for several years before Endo was able to secure the later acquired
patents

and

enforce

them

against

them

against

infringers.

Unfortunately for Endo, the FDA also subsequently asked Endo to
remove the reformulated Opana ER from the market, which meant that
consumers had already purchased oxymorphone ER at generic prices

- 76 -

and there was no oxymorphone ER alternative in the market sold by
Endo.
Having, in effect, backed the wrong horse, Endo could have
decided to stop selling any extended release oxymorphone pain
medication

as

intimated

by

Defendants.

Endo

could

have

also

attempted to reintroduce the branded Opana ER at its original
price, although there could have been a risk of consumer pushback
against that decision. A reasonable juror, however, could also
find that Endo would have either produced an authorized generic
version or entered a very similar license agreement with any number
of generic drug companies after enforcing the later acquired
patents, at which point the later acquired patents would have
little to no effect on the damages claimed by Plaintiffs.
Because it is at least possible that Plaintiffs could prove
damages under either theory, the Court denies summary judgement on
this ground.
d.

State Law Claims

Finally, Defendants move to narrow the scope of the unjust
enrichment claims under Arizona, Massachusetts, and Mississippi
law. According to Defendants, all three state laws contain a threeyear

statute

of

limitations

for

torts.

The

first

End

Payor

Plaintiff complaint was filed on June 4, 2014. As a result, all
recovery is limited to the three years prior to the filing date of
the

Complaint.

Under

one

of

End

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Payor

Plaintiffs’

theories,

however, Impax would have launched its generic Opana ER as early
as April 2011, which is approximately two months beyond the statute
of limitations.
End Payor Plaintiffs concede that Mississippi law prevents
relief beyond three years but argue that unjust enrichment claims
in Massachusetts and Arizona are governed by alternative statutes
which have longer statute of limitations. Antitrust claims have
traditionally sounded in tort. See, e.g., Supreme Auto Transp.,
LLC v. Arcelor Mittal USA, Inc., 902 F.3d 735, 743 (7th Cir. 2018)
(analyzing state unjust enrichment claims as a tort). A review of
Arizona and Massachusetts tort law shows it is governed by the
three-year statute of limitations. See Costanzo v. Stewart, 453
P.2d 526, 528 (Ariz. Ct. App. 1969) (applying Ariz. Rev. Stat.
Ann. § 12-543(1)); Mass. Gen. Laws ch. 260, § 2A. For this reason,
the Court grants the motion to limit summary judgment to damages
within three years of the first filed complaint as to the state
law claims in Mississippi, Arizona, and Massachusetts.
2.

Patent Issues

In the alternative to their first motion, Defendants have
also filed a motion for partial summary judgment as to some of the
patent issues within the litigation. First, Defendants note that
Opana ER’s later acquired patents have already been determined to
be valid and upheld by the Federal Circuit. As a result, Defendants
move

to

limit

any

recovery

by
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Plaintiffs

to

the

point

of

acquisition of the earliest valid patent, as opposed to point of
injunction from the district court or the subsequent affirmation
from the appellate court. Second, Defendants’ motion to limit
Plaintiffs from presenting any defense Impax had not prepared to
provide at the beginning of the underlying patent litigation which
ended shortly before trial with the 2010 Settlement and License
Agreement.
a.

Subsequently Acquired Patents

Endo received approval from the FDA on the ‘122 and ‘216
patents

in

late

2012

and

prevailed

in

federal

court

against

numerous generic drug manufacturers in defense of these patents.
(PSOF-PI ¶¶ 35–36, 41–47.) As a result, Endo argues that the Court
should grant summary judgment as to this material fact and prevent
Plaintiffs from recouping potential damages after the issuance of
these two patents.
Plaintiffs object on the theory that the later acquired
patents are not a material fact. Because the patents did not exist
at the time the 2010 Settlement and License Agreement was entered,
Plaintiffs argue that it is irrelevant too for the Court to grant
summary judgment as to this fact. Plaintiffs also note that they
do not seek damages after November 2012, obliviating the need to
consider the patents. A restraint on trade is “viewed at the time
it was adopted.” Polk Bros. v. Forest City Enterprises, Inc., 776
F.2d 185, 189 (7th Cir. 1985). As a result, this fact is not
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material in determining whether was an antitrust injury. However,
as discussed above, if successful, the fact is potentially salient
to show the extent of Plaintiffs’ damages. Defendants may argue
that the Broad License’s benefit to consumers over 2012 to present
outweighs the prior injury, and Plaintiffs must convince the jury
that the benefit of the Broad License either do not outweigh was
sufficiently unrelated to the harm as to merit damages. As such,
the Court denies the motion for summary judgment as to this
marginal fact.
b.

Underlying Patent Litigation Defenses

Defendants also argue that Plaintiffs are limited in their
patent defenses to those that Impax would have prepared at trial
and asks the Court to grant Endo summary judgment with respect to
two of Endo’s infringement claims. According to Defendants, this
will “streamline any trial” and “pare away any patent defenses
asserted by Plaintiffs that the trial court in the underlying
litigation would have found deficient as a matter of law.” (Mem.
on Patent Issues at 10–11, Dkt. No 535.)
Both parties vigorously dispute the specifics as to what Impax
would or would not have done in the original underlying litigation,
however, the Court does not find this to be an appropriate matter
to resolve on summary judgment. It is not usually necessary to
litigate patent’s validity to determine whether or not antitrust
laws were violated. Actavis, 570 U.S. at 157. Defendants’ focus on
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forcing summary judgment on patent issues is not helpful for the
trier of fact. If Endo believed that the patent was strong at the
time the contract was signed, Defendants can show that by providing
a justification for the reverse payment. Otherwise, “the size of
the unexplained reverse payment can provide a workable surrogate
for a patent’s weakness, all without forcing a court to conduct a
detailed exploration of the validity of the patent itself.” Id. at
158.
Further, the jury must evaluate the contested restraint on
the market, here the 2010 Settlement and License Agreement, at the
time the restraint was adopted. The Court notes there was no
summary judgment motion pending when the agreement was reached
five days after the start of trial, and to resolve patent issues
now would confuse rather than aid the jury.
While

discussion

of

the

underlying

patent

at

issue

is

inevitable, the Court will not prematurely foreclose the jury’s
determination in this matter through summary judgment on the
hypothetical patent defenses that might have been made at trial.
As stated throughout this opinion, the purpose of this litigation
is not to recreate the decision the 2010 jury would have made a
determination about the validity of the patent, but rather whether
Endo had, or likely had, a valid patent at the time of the 2010
Settlement and License Agreement. For these reasons, the Court
denies the motion.
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III.

CONCLUSION

For the reasons stated herein, the Court rules as follows:
1.

Defendants’ Daubert motions to exclude Ms. DeLeon (Dkt.

No. 513), Mr. Molina (Dkt. No. 516), and Dr. Rosenthal (Dkt.
No. 545) are granted.
2.

Defendants’ Daubert motions to exclude Dr. Leitzinger

(Dkt. No. 529) and Dr. Leffler (Dkt. No. 552) are granted in part
and denied in part.
3.

All of Defendants’ other Daubert motions (Dkt. No. 510,

Dkt. No. 537, Dkt. No. 541, Dkt. No. 546, Dkt. No. 550, Dkt. No.
556) are denied.
4.

Plaintiffs’ motions to exclude Dr. Patel (Dkt. No. 519),

Mr. Figg (Dkt. No. 521), Dr. Fassihi (Dkt. No. 524), Dr. Green
(Dkt. No. 527), and Dr. Berneman (Dkt. No. 528) are granted.
5.

Defendants’ Daubert motions to exclude Dr. Addanki (Dkt.

No. 526) and Mr. Singer (Dkt. No. 520) are granted in part and
denied in part.
6.

All of Plaintiffs’ other Daubert motions (Dkt. No. 522,

Dkt. No. 525, Dkt. No. 523) are denied.
7.

Defendants’ motion for summary judgment as to the state

claims is granted but denied as to all other claims in Defendants’
summary judgment motions. (Dkt. No. 532, Dkt. No. 539).

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IT IS SO ORDERED.

Dated: 6/4/2021

Harry D. Leinenweber, Judge
United States District Court

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