U.S. District Judge Michael P. Shea on Wednesday granted in part and denied in part Amneal's motion for summary judgment in a sprawling antitrust suit brought by attorneys general from nearly every state and several U.S. territories against companies including Sandoz, Mylan, Pfizer, Sun Pharmaceutical, Taro and Teligent.
The case, one of three generic drug suits filed by the states and referred to by the parties as "the Dermatology complaint," alleges "collusion in pricing, market allocation, and bidding for some eighty generic drugs, chiefly for dermatological applications."
On the drug-specific claim, Shea found a jury could conclude Amneal colluded with Mylan, Taro and Sun over Phenytoin Sodium Extended-Release, a narrow therapeutic index drug used to treat epileptic seizures. "Viewing the evidence in the light most favorable to the States, I conclude that there is a genuine dispute of material fact about whether Amneal conspired with at least one competitor to follow price increases and avoid poaching competitors' customers," Shea wrote.
The states point to a sequence of price increases in 2014 — Taro on June 2, Mylan internally on June 18, Amneal on June 23, and Sun on July 14 — accompanied by what Shea described as a "flurry of phone calls" between executives at the four companies. After Amneal's Shannon Rivero learned Taro planned to raise prices, she forwarded word to colleague Edward Allen Lowther with the note, "Hope Mylan sees this." Lowther replied, "They will follow."
Lowther testified at his deposition that his calls with Mylan's Jim Nesta were not about business and that he and Nesta "never did discuss business." Shea was unpersuaded, writing that "the short duration of his back-and-forth calls with Nesta — coming in quick succession just as pricing decisions were being made — are more consistent with efforts to obtain and confirm specific items of basic information — like pricing plans — than a social chat between friends." He added that it "would be odd for two old friends to catch up with each other in staccato bursts consisting of a series of very short calls spread over a few days."
Shea also credited Fifth Amendment invocations by Nesta, Mylan's Mike Aigner, Taro's Ara Aprahamian and Sun's Susan Knoblauch when asked whether they had reached pricing agreements with Amneal. Nesta declined to answer whether he had told Lowther that "Mylan would follow price increase on Phenytoin sodium ER." Shea found that, combined with other record evidence, "a reasonable juror could infer from these invocations that responses to these questions would have been unfavorable to Amneal."
Amneal argued its conduct reflected a response to a costly supply shortage and Failure-to-Supply penalties, not collusion. Internal emails show co-CEO Chirag Patel asking about "continuous back orders" and co-CEO Chintu Patel writing, "We do not mind giving up [the] entire product." Shea acknowledged the defense but wrote that "even a reasonable juror who credited Amneal's initial motive for the price increases could find that Amneal effectuated those price increases through collusion rather than unilateral action."
On the overarching conspiracy count, Shea ruled for Amneal. He contrasted the record with his prior ruling allowing a similar claim against Aurobindo Pharma to proceed, noting Amneal's conduct "concerns only one drug, which is not a dermatology drug," that Amneal did not enter a Deferred Prosecution Agreement with the federal government, and that no Amneal employee pleaded guilty or invoked the Fifth Amendment. "No Amneal employee copped to similar conduct" as Aurobindo's cooperating witness Anthony Thomassey, the judge wrote.
The states argued that Taro's DPA — covering conduct from March 2013 to December 2015 — showed the Phenytoin collusion was part of a market-wide pattern. Shea disagreed, noting the DPA "speaks to Taro's anticompetitive behavior, not Amneal's" and does not list Phenytoin among the drugs identified.
Shea has previously ruled on summary judgment motions from Mylan and Aurobindo in the same litigation. The cases were originally filed in the District of Connecticut, transferred to a multidistrict docket in the Eastern District of Pennsylvania, and remanded back to Shea in April 2024.