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Antitrust Case Against Drugmakers Shifts to Connecticut Following State Venue Trend

 |  February 5, 2024

The antitrust case against around 40 pharmaceutical companies accused of conspiring to artificially inflate generic drug prices has been moved to a Connecticut court.

The decision by the US Judicial Panel on Multidistrict Litigation to deny the drugmakers’ attempt to consolidate the cases into multidistrict litigation in Pennsylvania highlights an emerging trend where states are increasingly asserting their authority to litigate antitrust cases within their own jurisdictions, reported Bloomberg.

The judicial panel’s decision cited a year-old law that grants state attorneys general greater influence in determining the venue for antitrust cases. This recent shift in legal proceedings suggests that the widespread application of this law could provide plaintiffs with a home-state advantage and expedite litigation by allowing states to transfer lawsuits out of multidistrict proceedings.

Connecticut Attorney General William Tong expressed satisfaction with the decision, stating, “I am pleased these important cases will move forward here in Connecticut.” The case specifically alleges that pharmaceutical companies engaged in a conspiracy to raise the prices of generic drugs and impede competition.

Related: US AGs File Complaint Against Generic Drugmakers

Antitrust experts weigh in on the broader implications of this trend. Roger Alford, a professor at Notre Dame Law School specializing in antitrust issues and a former Justice Department antitrust division member, noted, “Speed is viewed by Congress as a critical benefit to enforcement. This will factor into the strategic decision-making of state attorneys general going forward.”

In a November filing, defendants Teva Pharmaceutical Industries Ltd., Sandoz Group AG, and Aurobindo Pharma Ltd. argued against transferring the case out of Pennsylvania, asserting that it would create chaos and necessitate litigating the same allegations in multiple forums. The companies are concurrently facing multiple class-action lawsuits related to allegations of price-fixing.

According to Bloomberg, Other pharmaceutical companies facing state-led antitrust suits have also expressed concerns about the challenges of duplicating litigation, contending that multidistrict litigation is a more efficient process.

This legal maneuver follows a similar ruling in January, where a federal judge allowed Arkansas to maintain its antitrust lawsuit against pesticide makers Syngenta AG and Corteva Inc. within the state, rather than consolidating it in North Carolina. The judge justified the decision by invoking the State Antitrust Enforcement Venue Act (Public Law 117-328), enacted in December 2022, which has provided states with increased control over antitrust case venues.

Source: Bloomerg Law