Court Denies Motion to Dismiss; MSP Recovery Claims Proceed to Class Certification
by Kaitlin Gagnon
On July 28, 2023, Judge Iain D. Johnston of the U.S. District Court for the Northern District of Illinois denied Defendants Express Scripts, Inc. et al.’s motion to dismiss Plaintiffs MSP Recovery Claims designated series’ direct purchaser claims, allowing the Plaintiffs to proceed to class certification. The Court granted the Defendants’ motion to dismiss Plaintiffs’ indirect purchaser claims without prejudice.
Plaintiffs’ Third Amended Complaint (TAC) alleges the Defendants agreed to raise the price of Acthar, an adrenocorticotropic hormone (ACTH) used to treat a rare pediatric illness, to supracompetitive levels through an unlawful scheme which allowed Defendants exclusive distribution of Acthar. The TAC alleges that Defendants violated Sections 1 and 2 of the Sherman Act and the Florida Deceptive and Unfair Practices Trade Act (FDUPTA).
Acthar is the only FDA approved ACTH in the United States and provides relief for infantile spasms and dangerous seizures during the first two years of life. Acthar’s manufacturer, Mallinckrodt, acquired the product in 2001 when Acthar sold for $40.00 per vial.
In August of 2007, Defendants Express Scripts entities and Mallinckrodt entered into an exclusive distribution agreement for Acthar. Within weeks, the price of Acthar went from $1,650.00 to $23,269.00. By 2018, the price of an Acthar vial increased to $38,892.00.
The court agrees that Plaintiffs have plausibly alleged an antitrust violation based on the proximity of the price increases to the beginning of the exclusive distribution agreement.” The opinion concluded, “although Defendants have no duty to prevent illegal conduct, they have an affirmative duty to not agree and participate in an anticompetitive conspiracy.
Milberg’s Antitrust Chair, Peggy Wedgworth, stated, “the firm is gratified by the ruling which allows Plaintiffs to move forward and seek class certification for Medicare and other payors who have been damaged by the alleged scheme.”